The Future for Home Loans
Changes in Appraisals
We’ve already seen how Coronavirus has forced alterations in common real estate sales procedures such as appraisals.
The FHA modified its appraisal guidelines to temporarily suspend the requirement that an appraiser enter the home. Appraisals can be done, at least at the time of this writing and for a limited period, by observing the exterior of the property only, or with exterior review supplemented by other materials.
But those aren’t the only changes--the FHA recently announced innovations in how its appraisals are submitted.
The FHA Catalyst: Electronic Appraisal Delivery module was hailed in an August FHA/HUD press release as being an enhancement to the agency’s electronic appraisal report submission features “while maintaining industry standard appraisal data sets in use today throughout the housing finance industry.”
In its initial release, the module can be used by lenders to electronically submit appraisal reports and updates for FHA Single Family Title II forward mortgages, according to the press release.
Changes in Lending Standards
The Consumer Financial Protection Bureau (CFPB) is considering a new type of Qualified Mortgage guideline that could help future borrowers who were affected by financial hardship to qualify for a mortgage in spite of things like missed payments due to coronavirus-related unemployment, etc.
The hope is that such a program would benefit many including those affected by a disaster or pandemic-related national emergency. According to CFPB’s statement about this concept, the idea is that such hardship “would not disqualify a loan from becoming a seasoned QM loan if the borrower received a temporary payment accommodation and made full contractual payments.”
CFPBs efforts in this area are still at the proposed stage and are not being drafted into law, but it’s an example of the kinds of thinking that are being done at the highest levels of the mortgage industry.
The future of the mortgage industry must include considerations for the thousands of homeowners and potential homeowners affected by today’s financial hardships--the future going forward may provide some help for borrowers trying to plan and save in a new financial reality.
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