Brian Ripp ~ Your Bay Area & Fremont Real Estate & Financial Agent

The financial reform legislation signed into law on July 21 by President Obama will precipitate some key changes within the mortgage market that will likely affect homebuyers, according to U.S. News and World Report. Under the legislation, a new consumer financial protection bureau will be set up to establish and enforce rules for the financial marketplace and protect consumers’ interests. The law will force lenders to make sure that borrowers have the financial means to repay the mortgage loan before they approve it. It also bans brokers from receiving additional fees for putting borrowers into risky mortgages.

Great information from CRS Member Connect, on-line newsletter.

Starting Jan. 1, 2010, the Federal Housing Administration will adhere to new credit standards and appraisal guidelines for FHA-insured mortgages.  The new guidelines, which essentially align with HVCC rules, will prohibit the undue influence of appraisers, or the choosing of an appraiser, by mortgage brokers or commission-based lender staff.  In addition, the FHA’s appraisal validity period will be reduced to four months for all properties including existing, proposed, and new construction.  The action also provides new guidelines allowing a second appraisal to be ordered in some instances including when a borrower switches lenders.

for more info, go to www.hud.gob/office/adm/hudclips/letters/mortgagee