Local banks preparing for higher mortgage lending standards - Greenville, NC | News | Weather | Sports - WNCT.com

Local banks preparing for higher mortgage lending standards

Posted: Updated:

A federal law forcing banks to raise mortgage standards is set to take effect. And it's in place to protect you. But it could also make it tougher for you to buy a house.

Banks in Beaufort County and across the East are preparing for new regulations that could affect your ability to get a mortgage loan.

"It certainly does enhance or increase some of the work that we have to do internally," said Bruce Elder, the CEO of First South Bank. "We've been studying the regulations for some time and adopted processes and procedures that we've put in place to be able to deal with those regulations effectively."

Starting January 10, lenders will have to collect more documentation showing that borrowers can pay back their loans, documentation like proof of income, credit history, and a list of unpaid debts.

Elder says this could make it harder for unqualified borrowers to get a loan.

"There is some concern that potentially homeownership could decline as a result of these regulations, but again, I think money is available. You simply have to meet the new qualification standards," he said.

President Barack Obama in 2010 signed the law, called the Dodd-Frank Wall Street Reform and Consumer Protection Act, in response to the risky lending that contributed to the collapse of the housing market and the recession.

"I like the law," said Chocowinity homeowner Beth Harden.

Harden believes the law will help prevent foreclosures for people who can't afford their homes, like her friends whose debt was so high, their families had to help pay it back.

"They were embarrassed and then for some it was a reality call. 'We have too big a house. We should have never done this,'" she said.

The new law also caps the amount of fees lenders can charge. It's designed to prevent another housing crisis.

The law is named after two members of Congress, Chris Dodd and Barney Frank, who crafted the bill.

"Homeownership is not for everybody, even though we've been sold the American dream that it is," said Washington visitor Megan Lynch.

  • PoliticalMore>>

  • Obama eats ribs with 4 Kansas City letter writers

    Obama eats ribs with 4 Kansas City letter writers

    Tuesday, July 29 2014 10:12 PM EDT2014-07-30 02:12:58 GMT
    President Barack Obama plans to chew over the concerns of heartland Americans by taking four Kansas City residents out to dinner.
    President Barack Obama feasted on barbecue Tuesday with four people who wrote him letters in a trip to highlight the struggles of working families in American's heartland, as the clock ticked on pressing issues before...
  • China: Ex-security czar Zhou under investigation

    China: Ex-security czar Zhou under investigation

    Tuesday, July 29 2014 9:17 PM EDT2014-07-30 01:17:27 GMT
    China's Communist Party says it has launched an investigation into a former domestic security chief who was once among the country's most feared leaders.
    China's ruling Communist Party announced an investigation into a feared ex-security chief, demonstrating President Xi Jinping's firm grip on power and breaking a longstanding taboo against publicly targeting the...
  • Senate passes highway bill, sends it back to House

    Senate passes highway bill, sends it back to House

    Tuesday, July 29 2014 8:47 PM EDT2014-07-30 00:47:27 GMT
    The Senate is scheduled to take up legislation Tuesday to keep federal highway money flowing to states, with just three days left before the government plans to start slowing down payments.
    The Senate voted Tuesday to keep federal highway money flowing to the states into December but only after rejecting the House's reliance on what lawmakers called a funding "gimmick" and moving to force a post-election...
Powered by WorldNow

3221 South Evans Street
Greenville N.C. 27834

Telephone: 252.355.8500
Fax: 252.355.8568
Email: newsdesk@wnct.com

Can't find something?
Powered by WorldNow
All content © Copyright 2000 - 2014 Media General Communications Holdings, LLC. A Media General Company.