Recently, a major change was produced on the New York economic market and the change will most certainly interest those who have to pay taxes. The newly established rule was imposed by the Consumer Financial Bureau and it highlights that lenders will have to offer home buyers the option to pay their mortgages with no additional fees. At this point, homeowners pay various fees and taxes to banks, in order to receive lower interest rates on their mortgages and thus, the situation needed to go through a major change.
The director of the Consumer Financial Protection Bureau, Richard Cordray, told the media how difficult it is for consumers to pay their loans in time, when they are forced to deal with such immense taxes and fees. These should not exist, especially in a time where so many people are in debt and the country is barely struggling to overcome the economic crisis. Mr. Cordray also said that they intend to provide consumers with more accessible and transparent options and enable them to choose the exact type of loan that is the most suitable for their needs. Likewise, in the case of the Dodd-Frank Act, the Congress expressed clearly its intention of cleaning up the entire process for a residential mortgage, an intercession that was highly criticized on a national level and was said to have been an important factor that caused the financial crisis. The whole idea was intended to make customers understand the mortgages they are offered, as well as know all about the fees they will have to be paying. However, the situation was beyond that when people are declaring that they have been denied even a simple bank account.
In addition, the mortgage proposal is not beneficial only to consumers, but also to the lenders. The extra fees and points on mortgages are banned only in the cases when the originator makes a personal commission for the entire transactions. In the other cases the consumers will still have the possibility to reduce their mortgage through these points and fees. It must be remembered that this thing is only valid as long as the fees paid by the customers really result in a reduction of their mortgages, and as long as the lenders don’t receive any commission. Likewise, lenders have to provide non-fee mortgages too.
Furthermore, a senior official from one of the consumer bureaus that had a contribution to the rule affirmed that it was basically implemented to create a balance in the entire process of lending. Overall, it is a good thing to offer consumers the possibility to pay their rates in advance, through such fees and extra-points, but there also were needed few regulations to guide the entire process, and stop any of the parts from dismissing the law. So far, there seems to have been positive outcomes since it was implemented and hopefully it will make it easier for most people to pay their debts, and for lenders to keep the situation under control.