Key Trends in US Mortgage Banking Regulation in 2016

If you are in a small business, this is the best time to research the best mortgage options in the market. The latest trends in mortgage banking in 2016 feature three key benefits that may prompt people to look out for lenders. You will also know, for instance, if online lending continues as the most preferred method; if there will be respite for those with bad credit history; which borrowers are likely to gain the most from the new regulations, and more.

Back to 2015, briefly

Just to give a short scenario, the online lending landscape registered significant growth last year. This is due to the new generation of borrowers using the digital platform to do business more often. Another significant point is the increase of women entrepreneurs and micro businesses as borrowers with a conscience to repay loans on time. During 2015-16, many first-time business owners have looked up online options. The online lenders face fewer regulations and this has been a good situation for both, lenders and borrowers.

The three concerns that tilt the scales

• Will online trends dominate as they charge lower than the traditional counterparts? Many conventional lenders do not approve of this as they have pushed off smaller businesses in the past.
• Bigger players expect more transparency from online vendors who charge less. In 2016, the number of borrowers seeking online options increased.
• The emergence of small business borrowers’ Bill of Rights has made its debut. This will set rules on how the lenders treat the borrowers in the near future.

These three concerns have prompted the treasury department to seek a public opinion to make new rules on the online lending market trends. This eventually works for lenders, as they see how the industry is shaping up. Currently, the SBA loans are the most preferred choice. It may be difficult to avail one, but it is worth the trouble. As long as lenders do due diligence, the scheme works.

The challenges for banking trends

The constant problem of overlooking bad credit owners will remain a challenge. There are still some customers who have not yet used the lender market. The main issue will be to get new customers as the scene matures and saturates. The rising interest rates have staved off newcomers. Had it not been for the online platform, things would have spiraled down. In the recent mortgage and finance trends, it has been observed that owner-financed land contracts are generally stipulated for 5-year mortgage period, which means to pay the entire due after completion of five years, irrespective to how much the buyer has paid off.

Just like the bubble that has burst so often, risk managers get even in this situation as the dollar becomes stronger and returns to the country—but that remains to be seen. Will they heed the new warning signs and mitigate risks for consumers? Meeting the current regulatory trends will be better than making assumptions.

Is increasing the credit limit wise?

When banks look at new customers to take credit for various instruments, it would be a wise decision only if they know the strength of the borrower. The credit population has already increased and alternative sources are needed to be in business. There is a clear need to check the regulatory history again to safeguard the interest of everyone.

In short, there are challenges and also windows of opportunity that can be seized by small-business owners. They can still bank on the goodwill and continue to go ahead with their vision.