New regulatory requirement imposed on banks and financial institutions may have impacted a bank’s ability to generate mortgages for home buyers by increased requirements for disclosures, notices, statements, and documents related to lending. Evaluate the pros and cons of increased regulatory requirement, indicating the impact to the lender and the buyer. Provide support for your answer.
PROS:
-Protect the consumer from abusive practices by companies offering financial products and service.
-Prevent repeat of the 2008 recession.
-Regulate banks.
CONS:
-Decrease lending
-Increase administrative cost to mandate regulations.
-Possibility of continued failure due to failure to enforce basic provisions of the banking law.
Increased regulatory requirements on banks and financial institutions is a great requirement for both lenders and buyers for the economy sake. It protects consumers from being pressured into risky deals and monitors financial institutions to make sure disclosures are properly administered. Regulatory requirements also monitor potential risk to avoid affecting the financial industry as the 2008 recession resulting in billion dollar bailouts worldwide.
Based on your review of the mortgage rate trends, predict the future (within a year) rate of the 30-year fixed and the 15-year fixed rate mortgage, indicating the basis and rationale of your prediction, and the resulting impact to the mortgage industry.
Based on my review of the mortgage rate trends I believe that the interest rates will continue to remain steady for both the 30-year and 15-year fixed mortgage rates because mortgage originations are still down. With lower interest rates consumers can put money back into their pockets boosting the economy in preparedness of rates to rise in future years just not within 2015. I believe it will take another 2-3 years before interest rates increase