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    Dodd Frank Act [The Run Down]

    Attention homebuyers (and most and all others concerned) — What does the repeal of Dodd Frank regulations mean to you?

    A hot topic of controversy at the moment; the rollback of Dodd Frank has caused quite an up rise of discussion in today’s news. Fears justified from the 2008 financial crisis are resurfacing as laws which held banks accountable post recession are being loosened and repealed. With that being said however, new regulation breakdowns are bringing along with them an overdue revitalization to the lending industry — and correspondingly, the real estate industry. Below is a simplified breakdown of the major highlights which the revised Dodd Frank entails — and how these changes mean to you. [Special highlight being — it should be easier for you to get a mortgage]

    1. The number of banks labeled systemically important or ‘too-big-to-fail’ will be reduced with the threshold of assets moved from $50 billion to $250 billion. This will significantly lower the numbers of big banks which are required to follow stringent lending supervision criteria, therefore allowing higher levels of leniency in underwriting abilities. What this means to you? It should be easier for you to get approved for a mortgage, especially from a smaller local credit union (whom are not considered ‘not-too-big-to-fail). Beyond letting smaller institutions to better compete in the lending game, the relevancy of this change will largely apply to 1099 employees with inconsistent monthly incomes and others with less than ideal debt to income ratios (which are currently set at a 43% threshold).

    2. Student loan perks – new legislation will include two provisions affecting the repayment of student loans.
    What this means to you? Essentially if you as the student borrower were to die; lenders would be mandated to release any co-signers of your loan from remaining debt (a serious advantage point when leveraging your next co-sign request on a property purchase — thanks grandma). The other provision is this legislation also works in reverse if in case the co-signer dies, the student borrower be would not be default.
    3. Free Credit Freeze

    What this means to you? You will be relieved of the fee which in the past was charged to freeze your credit report, which would protect you from a scammer using your personal credit information (such as in the recent case of the 2017 Equifax crisis)

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