On March 13, the Whitehouse issued an Executive Order (EO) titled Promoting Access to Mortgage Credit, which could pave the way for significant changes that would improve mortgage access and lower the cost of mortgages and closings by reducing regulatory burden.
Noting that statutory and regulatory changes over the past two decades have increased the compliance costs of mortgage origination, the EO opines that the increased costs have contributed to a significant decline in bank participation in mortgage lending, specifically for community banks, and have raised costs for homebuyers.
“The regulatory and rule changes have undermined community banks’ businesses, concentrated credit and liquidity risk outside the banking system, and resulted in reduced access to credit for some creditworthy borrowers, including rural households and low- and moderate-income households,” the EO states.
One specific area addressed in the EO of great interest to real estate agents, lenders and title agents is Section 7: Digital Mortgage Modernization, which asks the Secretary of Agriculture, the Secretary of HUD, the Secretary of VA, and the Director of the FHFA to consider adopting several improvements that would bring the mortgage process into the 21st Century, including:
As rising home prices and inflation continue to keep some homebuyers out of the market, real estate industry professionals are constantly looking for ways to reduce the financial burden. Promoting digital mortgages, especially remote online notarization (RON), can be a quick win for homebuyers. RON offers significant savings in the closing process by eliminating travel expenses, printing, and time costs.
The devil is in the details, however, and the EO is not a slam-dunk for the real estate industry.
In a March 18 blog Executive Order Seeks to Expand Mortgage Credit for Customers of Community and Smaller Banks submitted to JD Supra by Cooley LLP, the law firm noted that the EO does not itself revise existing regulations.
“It primarily directs agencies to consider rulemaking, guidance updates and program changes,” the firm noted. “As a result, many of the items flagged in the order – particularly those that would require notice-and-comment rulemaking or coordinated interagency action – could take time to propose, finalize and operationalize across the mortgage ecosystem.”
The good news for homebuyers is that RON closings are already widely available. But the directive to move to digital platforms for HUD, the VA, USDA, and FHFA – agencies which provide a critical number of government-backed mortgages to homebuyers most vulnerable to affordability issues – could result in immediate savings to those clients who would benefit the most.
At Network Transaction Solutions, we are avid champions of eClosings with RON, offering this service as well as additional resources to help you grow your agency. Contact us today to learn about how we can assist you with eClosings with RON, municipal lien searches, HOA estoppels, mortgage payoff ordering and tracking, mobile home title services and more.
