New rules tough, but loans can still get done: Mortgage pro

by Ryan Smith14 Jan 2014
With the Consumer Financial Protection Bureau’s new mortgage rules officially in effect, many originators worry that the regulations will stifle business and make it harder for consumers to get loans.

But one mortgage pro is trying to look on the bright side. The new rules will mean stricter compliance and a ton of paperwork, but they won’t make business impossible, said Josh Moffitt, president of Silverton Mortgage in Atlanta.

“It’s going to be somewhat of an unknown. I’ve seen some stats where some lenders have said, ‘based on the previous pipelines this percentage of loans won’t be qualified,” Moffitt said. “I think in practice we’ve already been meeting a lot of these standards. … You just don’t see a whole lot of high debt-ratio loans going through these days. I think the common thought is it’s just going to take a lot more paperwork, more pressure on the buyers to provide certain things. We’re telling our borrowers, ‘Be ready with your paperwork, start early so you can avoid the pitfalls.’ ”

Moffitt said that although the new rules will make compliance tougher, he doesn’t expect lending to take a big hit.

“We don’t have loans we would have done that we don’t do now strictly because of QM,” he said. “We’ll still find ways to get people in houses – just with added documentation.

“Yes, it’s more paperwork and it’s tougher, but it doesn’t keep people who should be qualifying for loans out of the market,” he added. “We’ve all spent a lot of time around the water cooler saying, ‘What about this scenario? What about that scenario?’ You can think of ways it might not happen, but for the bulk of what we’ll do, we’ll still be able to do those loans.”

Still, Moffitt hoped the CFPB would study the outcomes of the new rules and be prepared to make changes as needed.

“What are the consequences going to be? We all hope this is a living, breathing thing and it’s not set in stone from now on,” he said. “If the consumer voice is heard saying, ‘We can’t get loans,’ hopefully they’ll revise it.”


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