In January 2013, the Consumer Financial Protection Bureau (CFPB) released several highly anticipated rules that will shape the mortgage industry for years to come. The new regulations, which implement provisions in the Dodd-Frank financial reform law, are intended to provide additional protections for consumers, establish new standards for mortgage lending, and prevent other lending-related problems that helped lead to the recent financial crisis.
One regulation provides standards designed to more accurately assess whether prospective homebuyers can afford to repay their mortgages. Other rules regulate compensation to loan originators (to reduce incentives for steering consumers to higher-cost or riskier loans) and strengthen loan originator qualifications. Additional rules relate to consumer protections for high-cost loans, appraisal disclosures, establishment of escrow accounts for higher-priced mortgage loans, and servicing of mortgage loans.
In addition, a rule issued by the FDIC, the CFPB and other regulators establishes new appraisal requirements for higher-priced mortgage loans.
Most of the rules will become effective in January 2014, with the exception of the escrow rule and certain parts of the mortgage loan originator rule, which will become effective in June 2013.
Are you in the process of filing your taxes? If you're expecting a refund, there are ways to focus on savings at tax time. For example, you can split part of your refund into a checking account for immediate needs and send some to savings for future use. Or, you can use some of the refund to buy a U.S. Savings Bond. In addition, look into IRS-coordinated programs offering free tax-preparation assistance. See the Fall 2010 FDIC Consumer News for more information (www.fdic.gov/consumers/consumer/news/cnfall10/happyreturns.html).
Also, having your refund direct deposited into your own bank account often is the best way to avoid costs and get your refund as quickly as possible. Beware of loans, "refund anticipation checks" or other options offered by tax preparers that claim to speed up a refund for a sizable cost.
Hurricane Sandy was a tragic reminder about the importance of preparing financially for a natural disaster, a fire or another tragedy, especially one that requires people to evacuate their homes and not return for days, weeks or months. For tips from the FDIC, see our article in the Summer 2011 FDIC Consumer News (www.fdic.gov/consumers/consumer/news/cnsum11/protectingyourfinances.html).