It is a good time to be an American consumer. Last decade’s housing bubble left behind a collapsed market and millions of disheartened and mistreated homebuyers. If the current effort to protect consumers suggests anything, it’s that if a phenomenon like the housing crisis occurs again, it will not be as a result of inattention or irresponsibility from the housing sector.
New organizations like the Consumer Financial Protection Bureau (CFPB) and initiatives like their TILA-RESPA Integrated Disclosure (TRID) rule were created specifically with the well-being of the consumer in mind. The U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) are continuing this approach with their Single Family Policy Handbook which will go into effect on September 14.
The handbook will include a mandate for lenders to encourage borrowers to get a home inspection upon first meeting them. This is intended to protect both parties and help homebuyers avoid preventable issues before purchasing a home.
HUD has also requested that the American Society of Home Inspectors (ASHI) provide buyers with information explaining the necessity and benefits of home inspections, the difference between appraisals and home inspections, why the value or condition of a new home is not guaranteed by the FHA and information on other health and safety issues including radon gas testing.
These continued efforts by HUD and the FHA will create a safer market for both lenders and borrowers. Homebuyers will receive a more transparent look at the properties they are considering and be able to make more informed decisions when purchasing. Consumer protection is important, and it should be the first priority for our industry.
To view the HUD/FHA Single Family Policy Handbook, please click here.