Financial reform implications
The public has been eager for “financial reform” in the wake of a severely weakened real estate market and a slowdown in economic growth so sudden that many institutions within and associated with the financial industry required government assistance. Mortgage applicants will now be required to be on more solid footing, as lenders will now be required to fully document a borrower’s income before agreeing to provide a mortgage loan. Lenders will also be required to determine that borrowers can otherwise repay their loans. While it is unfortunate that homebuyers wound up in situations where they could not afford their loans, with these reforms it is unlikely there will in the future be the wave of debtors facing a mortgage deficiency after foreclosure or short sale. It is also likely that certain credit accounts might be given preference by retail merchants for the lower transaction fees associated with them. This will hopefully give consumers more choices and perhaps encourage debtors to keep their accounts in good standing.
