LAUREN BUNTING ■ Contributing Writer
(March 22, 2013) Earlier this month, the National Association of Realtors held a roundtable discussion with executives from three leading lenders: Chase Mortgage Banking, Wells Fargo Home Mortgage and Quicken Loans. The discussion covered the difficulties buyers face when trying to obtain mortgage financing, what it will take to get private mortgage capital back into the market in a significant way, and how lenders expect new and upcoming federal rules in mortgage financing to affect origination, underwriting and servicing processes.
The discussion opened up with references to the qualified mortgage (QM) rule, which takes effect in early 2014 and requires lenders to make loans only to borrowers who have a reasonable ability to repay the loan. All three lenders made reference to a transitional period ahead as the new rules are implemented as well as interpreted, with Joseph Rogers of Wells Fargo Home Mortgage stating, “QM goes into effect Jan. 14, 2014, but that does not mean that all of us on the day will start to implement. We have technology, underwriting and training to do … it’ll be an educational process for all of us in the industry.”
Related to this QM rule, an area that came up in the discussion was about the difficulty self-employed borrowers face.
“They will have to provide financial statements for many years and more,” said Shawn Krause of Quicken Loans. “Even training is in question. How much has a person had in training so lenders can know if they can really continue in their role? It’s about a hundred pages of underwriting interpretations.”
Another important discussion topic affecting our local market was condo lending. The NAR moderator asked, “When will we see more private capital purchase participation in a space like condos where there has been a restriction among Fannie, Freda and FHA?” The Chase Mortgage Banking representative, Saber Salem, pointed out, “If the building doesn’t have the resources to maintain itself, it’s not a good situation for the consumer. It’s in the best interest of the consumer to make sure that condo projects meet agency guidelines because it actually opens up liquidity for everyone.”
But, he mentioned that depending on the condominium and on their relationship with the customer, Chase is making some adjustments in terms of how they look at some condo projects.
— Lauren Bunting is a member of the Coastal Association of Realtors and a licensed REALTOR® with Bunting Realty, Inc. in Berlin.