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Let's begin the new year right with a word about regulation. I know-what a bore. But I think a short discussion of Federal Regulation on lending might be instructive. The National Association of Realtors projects 2016 as the best year for real estate since 2006. Many folks will be new to the market and many will be re-entering a market that is light years different than when they originally bought their homes and obtained mortgage financing.

One might argue that regulations gum up the works, and they certainly can slow things down, that's for sure. However, given the recent recession that was in a large part caused by an over inflated real estate market and the selling of fraudulent mortgage bonds, I would have to say as much as regulations make the process more difficult, they were needed.

So how do these federal requirements affect you, the consumer? Let's begin with the Patriot Act. While on the surface of it, that doesn't look like a law that would affect mortgage lending, it affects banking, specifically deposits. The Patriot Act requires that when a consumer is engaged in any activity that involves the Federal Banking system - which includes mortgages -that all large deposits are sourced. In other words, the origination of the deposit has to be documented. What is considered a "large" deposit? The Federal government has left it up to individual lenders to define a large deposit. I have seen lenders that cite any deposit over $99 as a "large" or in the case of our company that uses 50% of the borrower's gross monthly income which is much more generous. So while tracking down that $5000 gift Granny gave you for Christmas may seem like a hassle, we aren't doing it because we are trying to make your life more complicated - we are doing it because we have to. (This act also covers money laundering and lending fraud as well as is a monitor of terrorist activities.)

Then there are the Qualifying Mortgage Regulations that came into play a couple years ago. This set of regulations determine the rules we have to use to be sure mortgages meet a certain set of guidelines with the borrower's ability to pay back the mortgage. Those rules also determine how much we can charge to do the mortgage which in turn determines how big a mortgage we can do. (This is why it is very difficult to find anyone who can work with you on a $30,000 or $35,000 mortgage-we can't close it without breaking federal law on the amount we can make on a mortgage-basic fees put us in non compliant situation.)

The Dodd/Frank Financial Reform Act establishes how we disclose fees to our clients with strict timelines on when these fees must be expressed. This year's TRID (or TILA-RESPA Integrated Disclosure) further refined Dodd/Frank and sets wating periods prior to closing once the final closing disclosure has been delivered to the borrower. Dodd/Frank also set out requirements for how appraisal are handled - the requirements being that the information and appraisals be managed by third party companies in order to remove lending influences on appraisers.

The TRID waiting period has been one that most consumers have difficulty understanding. The idea is to allow borrowers to see the final fees with enough time to question them prior to closing without feeling pressured to close. In reality many buyers want to dispense with the waiting period and get to the closing table and get the keys to the new house. This is a case of the Federal Government protecting people who may not think they need protection.

Whether you like the idea or not, the role of your lender is to work as efficiently as they can to get you to the table as soon as they can within the law. Some things just are what they are, and it is better not to try to fight it. For every day that a borrower delays getting information to a lender that the lender needs to close a loan within the permeters of federal law , the borrower is only getting in the way of closing as quickly as possible. While none of us may care for having the process tinkered with, none of us is going to find a way around law either, so we might as well work with it to achieve a good result for all our buyers and sellers.