Several new regulations affecting the mortgage process took effect this past January, as required by Dodd-Frank legislation, which was passed to address the housing crisis and protect the interests of the consumer. While it has always been our practice to make sure our borrowers can repay their loans, this responsibility has now become law for all mortgage lenders. In practice, this means more work for you to provide us with required information, and more work for us to thoroughly document income verification and capacity to repay. We are also required to inform and educate the borrower by offering resources for mortgage counseling.
Despite the additional workload, there are benefits. For example, by the end of the process, you should have a more accurate idea of your home’s value than you may have had in the past. You won’t take on a mortgage that you can’t afford. These new rules also provide a more level playing field and help responsible lenders such as Tech CU by making it harder for reckless lenders to operate in the marketplace.
The reason I am talking about this today is because you may have applied for a mortgage recently and been surprised by all the documentation you were required to provide. You may have also felt the process took longer than it did in the past. Please realize that Tech CU has always followed very good mortgage practices and did not make the kinds of poorly underwritten loans that contributed to the housing crisis — however, we still must comply with these new regulations. We hope to keep the impact of these new rules to a minimum and will continue to serve you as efficiently and quickly as possible.
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