The financial crisis of 2008 was nearly a decade ago, but its massive ramifications are still felt in every corner of the mortgage sector. From private buyers to federally-insured loan originators, everyone has had to alter their approach.
One of the most apparent effects has been the creation of a new variety of super-agency via the Dodd-Frank Wall Street Reform and Consumer Protection Act (often shortened to just “Dodd-Frank”). This legislation brought about the most significant changes to the US financial service industry since the Great Recession of the 1920’s. While it initially drew heavy criticism from both sides of the aisle, the act has had several significant by-effects in its six years of existence:
Dodd-Frank’s most prominent effect has been a comprehensive suite of regulations for lending entities, compliance with which has required a massive amount of time and effort. Bank and non-bank lenders alike have been forced to hire new staff, dedicate company time to training, and generally rearrange process structure to fall in line with what the federal government requires. While the regulations’ ultimate goal is increased transparency and fairness in the loan origination process, many loan originators argue that the headaches caused by the transition far outweigh any benefit to the consumer, given that the entities themselves are spending too much time on compliance to get to the business of providing loan-seekers the best deal possible.
As the regulations took effect, many lending entities were forced to close their doors — and the ones remaining found themselves in a significantly more challenging playing field. Adaptability has become the most crucial trait for survival as both national and state-level regulators escalate their enforcement efforts. While Dodd-Frank is the most significant piece of legislation prompting this sea change, other policy efforts such as the TILA-RESPA Integrated Disclosure Act (TRID) have also narrowed the window of business for mortgage professionals.
The early 2000’s saw a refinancing and general real estate boom that promoted an emphasis on sales as the ultimate measure of success. With those days long gone, mortgage professionals are focusing more on profit than revenue, keeping an eye on long-term survival instead of short-term windfalls.
The expert team at Acuity National Real Estate Solutions is here to help with cutting-edge title and escrow services. Our 24/7 document portal provides you with around-the-clock access to necessary information, as well as anytime access to a live team of friendly support agents for your closings. Visit our homepage to learn more today.