The Federal Reserve has issued a rule that effective changes the way loan officers are paid on any loans originated after April 1 and it could have an effect on what you pay for closing costs in Eugene/Springfield.

There has been a lot of discussion in the mortgage field and a number of loan officers changing companies in advance of the rule taking effect but what will actually happen is still a bit up in the air. The change in the way that loan officers are paid on a loan will, more than likely, result in either higher rates or higher costs to the consumer.

What will happen will be new rate sheets rolling out from the lenders and in many cases, I am pretty sure that the new rate sheets will be higher than they were in the past. One of the reasons for this is that loan officers will no longer be able to charge an origination fee and be paid on that fee. Now, they will either have to be paid by the lender (on a set percentage of the loan amount) or else they will have to be on salary, according to what I am hearing.

This will mean also that many loan officers will not take on the harder loans, such as manufactured homes, credit repair or small loans because they will be paid on the amount of the loan, not the amount of effort it took to close the loan. This could mean a section of the home buyers (and refinancing) will have to go to lenders that specialize in those type of loans and have a higher income based on that loan type. Complicated how this will work, but we will see.

The two trade organizations for loan officers, the NAMB (National Association of Mortgage Professionals) and the NAIHP (National Association of Independent Housing Professionals) have both field suit to stop or delay the implementation of the rule. I am doubting they will be successful.

My company has made adjustments and is prepared for the change in the rules starting April Fool’s Day. Interesting, that is the same day I started Basic Training so many years ago. I will wait to see how it all shakes out, but expect higher rates and a whole lot less competition in the future.

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Navigating the mortgage approval process doesn’t have to be daunting. With me on your side those hurdles can be overcome. I am available right now to help you with the loan process and know the ins and outs of FHA, VA, USDA and conventional financing. If you want to buy a home using an FHA loan or refinance using VA, I am here to help. Contact me at Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401, 541-342-7576/541-221-3455 cell or by e-mail. Only you can make the choice it is time to get the process started.

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