My friend found their dream home in the mountains and was all set to move (the Uhaul was packed and everything!) before they were informed their mortgage file was delayed in underwriting and they were not going to close by their original closing date. While I was on-hand to commiserate with them, I bit my tongue when it came to saying this scenario was avoidable. There are three main factors that often delay a file in process or underwriting, and it behooves you as a borrower to know these potential pitfalls before you advance through the mortgage lending process.
Oddly enough, because I write this blog, I get asked all the time by friends and colleagues what I think will happen to housing prices. It has become an even more repetitive ask in these abnormal economic times, as it applies to a wide swath of the population, including: homeowners, potential homeowners, real estate agents, mortgage professionals, economists, media pundits, those casually interested in the housing market, and so on. I do not have a crystal ball, and often the speculative answers vary depending on how the question is approached. However, I do know what will influence prices in either direction.
This heat wave had me craving one of those $.99 Arizona Iced Teas at the convenience store the other day, but when I went to buy it, the store charged me $1.29! The cashier had no answers as to the markup, and paying a little more than I expected certainly cut into the joy of the experience, despite my ultimate satisfaction in quenching my thirst. It’s never fun to pay more than you expect, which has some borrowers looking to refinance frustrated wondering why refinance mortgage rates have shot up recently.
Opinion Piece | The U.S. mortgage-backed securities famous JPMorgan Chase CEO, Jamie Dimon, railed against mortgage regulations during the bank’s second-quarter earnings call earlier this month. He indicated the reason mortgage rates aren’t 1.6 percent or 1.8 percent “is because the cost of servicing and origination is so high due to the enormous number of rules and regulations [that] are put in place [which] do not create safety and soundness.” He was obviously referring to The Dodd-Frank Wall Street Reform and Consumer Protection Act, the massive piece of financial reform legislation passed as a response to the financial crisis of 2008 that just hit its 10-year anniversary. Dodd-Frank established a number of new government agencies tasked with overseeing the various components and aspects of the financial system that were believed to have caused the 2008 financial crisis, including banks, mortgage lenders, and credit rating agencies. The U.S. adopted an unprecedented volume of the new regulations outlined in the Act over the last decade, affecting everything from market structure to capital standards and balance sheet liquidity.