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-- Cameron now the president.
Also signing up financial regulation into law tomorrow before he does that we.
Think you should know what it may mean for your home what it may mean for your mortgage real life.
Applications here from -- Nicholas is the chairman of the certified mortgage planning specialist CN he gets an institute in Ann Arbor, Michigan -- thank you for coming on.
And tell us someone watching at home right now who saw this whole debate and doesn't have any clue how.
Finreg financial regulation applies to them what's one thing they need to now.
Players that -- Connell.
The financial regulation.
Actually will not take the fact probably for another year or two or maybe even -- because -- regulators still need to.
Write the regulations implementing the law.
So although it's being signed by the president tomorrow some of these things won't take effect for another few years so that's the first thing.
The second thing is that when it does take effect there's two things I think that are going to happen number one.
It's going to be tougher to get a mortgage because the guidelines now to get a mortgage to get a mortgage are normally set by banks and lenders.
Now they're being set by the government and it's kind of written in stone says the banks don't have the flexibility.
To -- the guidelines or tightening guidelines when they want to his economic conditions change it's not written in -- -- -- going to be tougher to get a mortgage number one number two.
Interest rates I think you're gonna go higher specifically on raids on one mortgages that are not.
And standard like out of the box types of loans.
So if -- from a consumer point of view from just the global macro point of -- some people I think you know what that's good news because we don't wanna get back into the situation that we found ourselves in and there's differing views on that.
A from the consumer point of view.
You do what you act now to buy your home is that is that a fair way of Reading into that.
That's exactly what I would suggest -- because that the fact of the matter is that interest rates are record lows.
You have the government subsidizing -- housing market in terms of 95% of all mortgages today that are originated.
Are either loans that are sold to Fannie Mae and Freddie Mac or insured by the FB chase this means that the government is artificially.
Subsidizing mortgages subsidizing.
Mortgage rates and one of the things the bill does not do you.
Is address what's gonna happen with Fannie Freddie and the FHA so we don't know next year if there's even going to be a three half percent down payment available.
For FHA loans are they gonna increase the down payment requirements.
Our interest rates going to go well we don't know these things so you can qualify for a loan now this is the time to do it.
All right so you're saying go out -- buy -- house now especially if you can qualify for many more difficult to qualify for -- in the future.
Understood you've also you looked at this billion depth and tried to figure out I would assume.
Some ways that maybe it benefits consumers are there any positives in here for people down the line.
Yes I definitely think there are some positive things for consumers in the bill the first.
Is that it's -- -- you originate loans now with prepayment penalties.
So if if if you pay off your mortgage in the past what happens is especially if you have a high cost loan like a sub prime type of loan or.
Like an option arm where.
You have negative amortization.
So many more exotic loans had a lot of prepayment penalties if you had a 200000 dollar -- the lender might penalize you say 220000.
If you wanted to pay that -- off right now it's a lot tougher for banks to do that so that's a good consumer protection.
In the bill -- some.
It's almost like a trade -- -- in -- for in some ways is that.
Indeed there are some consumer protections.
As it's been pointed out but they're also some things that may slow down the housing market just has more difficult to get a lot but we also want to end up back in the states it's.
We should we were in.
You really didn't take that tradeoff yeah I mean it's it's kind you know trying to -- as I really imbalance I mean you're the tournament right now yes go out by house -- on front I'm thinking about my head well.
It lacks a qualify for a loan right now you hear about some even -- interest rates and still is not near -- you think that's the problem why people aren't buying homes because they can't qualify for a mortgage because the standards are already the banks are already making it more difficult a mostly from the sector that we mostly do with that our particular firm many of those individuals cannot.
Qualify for bank -- -- -- -- -- you which is mostly they're going to be in.
To us they would kind of neighborhoods of -- economically challenged neighborhoods a lot of it was smaller -- especially in Michigan right right now a lot of those people that are natively there cannot even does get into the bank whatsoever.
I've even seen some are higher and clients from athletes and things like that get rejected they have the incumbent the credit may not be there or can be one of the -- -- the credit that gets it turned out all right just when things different.
-- Nicklaus thank you for your perspective some good practical advice on how to deal with the financial regulation to appreciate that.
Stick with -- for.
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