Mortgage Industry Trends

Dodd-Frank: Good or Bad for Lending?

Dodd Frank Good or Bad
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Dodd Frank Good or BadA recent ABA survey found that most mortgage lenders believe the new TRID rules will further restrict mortgage lending. Many say lending was already restricted resulting from last year’s ATR and QM rules. Now, TRID may continue such restrictions and possibly make it worse.

The same survey revealed that banks reported the highest number of mortgages made to first-time homebuyers in the survey’s 22-year history. It also found a decrease in foreclosures and a decrease in the average delinquency rates.

Are the Dodd-Frank rules curtailing lending or are they doing what they were intended to do? Do they force lenders to carefully review the consumer’s ability to repay and completely document the loan to ensure quality and compliance leading to better loan performance? Is bad or good? Is it fewer loans but better quality and performance?  Quality vs. quantity.

The ATR and QM rules forced lenders to take a careful look at the borrowers to whom they were lending money. This decreased lending but also increased the quality of the loans they made. This is good for lenders and consumers.

Consumers who can afford to buy and maintain a home are getting loans; many are first-time buyers as evidenced by bank’s increase. Independent Mortgage Bankers are increasing their share of the mortgage market by offering more FHA and low down payment loans while the banks seem to shy away from those loans. Loans are performing better.

Are things all that bad? There are homes being sold and loans to be made. Smart lenders are findings ways to streamline operations to service fewer consumers, with better quality loans, making for better profits and performance.

Do you think Dodd-Frank is Good or Bad?

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There will be some challenges presented by the new TRID rules but none that cannot be overcome with a little hard work, training, teamwork and technology.  Opportunities exist; you just need to know where to look and be prepared to take advantage when you find them.

Michael Vitali

About the Author

Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.
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Michael Vitali

About Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.
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