Chicago real estate, living and neighborhood perspective

Reform and Protection

In mid-July, President Obama signed sweeping financial services reform into law. The 2,300-page law creates an oversight agency for financial services companies and a consumer financial protection bureau.

The President said, “Our financial system only works—our market is only free—when there are clear rules and basic safeguards that prevent abuse, that check excess, that ensure that it is more profitable to play by the rules than to game the system. And that’s what these reforms are designed to achieve.”

The law includes provisions to curb risky mortgage lending, places restrictions on lenders’ use of yield-spread premiums and requires them to verify that borrowers have the ability to repay their loans.  Other changes, including to appraiser selection rules could also impact future transactions as was discussed in an early post.

Beyond mortgage reform, the law consolidates consumer protection regulations under the Consumer Financial Protection Bureau.  This bureau will assume oversight of the Real Estate Settlement Procedures Act, now overseen by the U.S. Department of Housing and Urban Development, and the Truth in Lending Act, now overseen by the Fed.

It’s best to speak to your bank and lender to understand how the new laws could affect your future transactions.

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Sherwin L. Sucaldito, REALTOR®
@properties
Member of The Institute of Luxury Home Marketing
Member of the Real Estate Buyer’s Agency Council, ABR
Certified Residential Property Manager, CRPM

Creative Commons LicenseReform and Protection” by Sherwin Sucaldito is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License.

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