The U.S. House of Representatives recently passed a bipartisan bill known as the Mortgage Choice Act of 2015. The bill essentially reforms two existing regulations – Dodd-Frank Wall Street Reform and Consumer Protection Act and the Truth in Lending Act (TILA). Will the proposed changes benefit the consumer? Let’s break it down.
Effective October 3, 2015, (extended from August 1, 2015) the Consumer Financial Protection Bureau (CFPB) will implement a rule intended to reconcile inconsistencies between two federal acts that regulate the mortgage qualification process. The new rule, known as TILA RESPA Integrated Disclosure (TRID), seeks to simplify standard loan documentation, limit fees charged to consumers, make documentation easier to understand, aid consumers in comparison shopping, prevent surprises at the closing table, and clarify timing requirements for disclosure of final loan terms and costs. Here’s what you need to know about the changes put forth by the new “Know Before You Owe Rule.”
What kind of income documentation do you need to provide in order to qualify for a mortgage? Lending requirements have changed at a rapid pace, largely due to a regulatory environment seeking to prevent a repeat of the real estate collapse. While it used to be good enough to state your income, regulations now require that income be “fully documented”. To clarify, here is a list of the forms of documentation that are used to verify income in the majority of mortgage qualification scenarios in 2015: