Typically, banks are thought of as the most reliable source for a home loan, but as consumers are in a tight market, more options have come to light. Currently, banks seem less than eager to offer mortgages and home loans to consumers. More and more, non-bank lenders are filling the gap left by banks retreating from the mortgage and homeowner loan market. Despite filling an obvious need, non-bank lenders have come under fire for less regulation by Congress and in the media as well due to a lack of clarity on regulations.
While banks have been an old stand-by, their interest in the market is shrinking. As a loan officer, it’s important to know the ins and outs of both a bank and non-bank loans.
The term “non-bank” may lead one to think that regulation is less strict than on non-bank lenders. However, they are subject to background checks, keeping their lending knowledge current and undergoing repeated SAFE Act examinations. Additionally, related to mortgages, non-bank entities must undergo CFPB testing. This process also rolls over into having to fulfil state and national requirements. Bank loans, on the other hand, are not subject to SAFE Act exams.
Despite the objections of government officials about the growing non-bank lending marking, most non-bank mortgage lending is funded by government loans. The regulations and requirements that rule government loans, like operational and net-worth requirements, are all the same across the board, regardless if the loan originated from a bank or non-bank lender. This is important to note depending on your clients, as it is important to direct them to the service that makes the most sense for them.
Following the 2008 crisis, a lot of finger pointing and scapegoating occurred. To this day, many consumers have an incorrect perception of non-bank lenders. Help inform potential clients of the advantages of your service and put them at ease.
With a network covering 50 states, Acuity is uniquely positioned to help deliver the title services you need within the regulations and rules in which you have to operate – bank, or non-bank lender. We utilize cutting edge technology to streamline the mortgage closing process. Contact us Acuity National Real Estate Solutions, LLC today at (502) 238-7500 or visit our homepage to inquire about our services.