When I first heard about the proposed changes being considered with the Dodd Frank bill I promptly changed the name of the bill to Frankendodd. Frankendodd, the great monster of mortgage regulation, was being sewn together from a combination of leftover rules and proposals and previously cast aside concepts. In my mind’s eye I envisioned some cheesey green monster straight from an Abbot and Costello film slowly making his way toward small towns spreading terror and panic throughout the populace. Eventually the small villages gather together with pitchforks and torches and put an end to the monster’s nefarious activities. Order is restored. The people rejoice. You get the picture.
In my opinion, our industry thought that Dodd Frank was going to run the typical course of a low-budget horror movie. Initially there would be a mysterious series of unexplained changes in the landscape. The Army would be mobilized and their weapons rendered harmless. The alien/monster/psychopath would be revealed to all – gasp – and we would all realize at the same moment that we were powerless to stop the terrible evil that had been introduced into our world. And then someone would sneeze and the monster would die from a cold. Roll the credits, grab your popcorn container, wait for the sequel.
But this time there was no miraculous ending. The monster is still out there but this time he’s as likely to be seen shopping at Ikea as he is at the wrong end of a pitchfork. Times have changed.
In the last week I have had an unusual number of delays with closings. Unresolved repairs in a few cases, shocking early employment termination just prior to closing in another, unmotivated Bank on a short sale or two and mortgage insurance delays on another. In all of these transactions I have been able to extend locks and/or take action behind the scenes to shield the consumer from any fallout. I can’t say that I have been thrilled with the obstacles but I’ve been able to overcome them with as little inconvenience to the customer as possible. But these will be the last loans that I can do this with.
My next group of files that will be closing will fall under the new regulations. When a seller decides at the last-minute that they are no longer motivated to finish repairs by the closing date I won’t be able to pay for a lock extension. When a loan has to be restructured at the last-minute due to unforseen circumstances on the part of the consumer, the cost of any pricing change will have to be born by the consumer. This is one of the real challenges with the new regulations. There will continue to be a huge need for real expertise on the part of the Realtor and the Loan Officer to ensure that as many obstacles as possible are identified and rectified at the beginning of a transaction. More than ever before, it is truly important that consumers seek out responsible, knowledgable and experienced professionals to work with. Rate and terms are still an important component but as the landscape becomes more and more complicated, the ability to safely navigate amidst turbulent waters becomes the primary focus.
Yes, the monster is still out there roaming the countryside. He will do damage. He’ll probably steal your chickens, slash your tires etc. So choose your team wisely. Make sure they have pitchforks.