As reported by Reuters, the attorneys general of Michigan, Oklahoma and South Carolina are challenging a portion of the Dodd-Frank law that empowers the Treasury secretary to order the liquidation of failing financial institutions.
Congress passed the Dodd-Frank bill after the 2007 to 2009 financial crisis, giving regulators broad authority to oversee financial institutions. The law has drawn criticism, though, mainly from Republicans and industry groups that believe it goes too far, and can hinder small businesses by limiting their credit.
"The new regulations do not stabilize our economy, they create greater uncertainty," Alan Wilson, South Carolina's attorney general, said in a statement. "Dodd Frank replaces the rule of law with the rule of politics."
Specifically, the lawsuit challenges a portion of the law that was originally designed to prevent future bailouts of financial firms. However, states argue that this provision would restrict a business and its creditors to have a voice in the matter.
With uncertainty still abundant in the real estate and financial fields, lenders would be wise to use an amortization schedule for loans. This blog has previously reported on how the Dodd-Frank law and subsequent Consumer Financial Protection Bureau were created to restore a balance between American consumers and the struggling housing market. Until the stability is solid though, extra precautions need to be taken.
Additionally, a recent Wall Street Journal article explained how seemingly insignificant issues in a home could hinder an individual's chance of getting a Federal Housing Administration (FHA) mortgage. According to the article, appraisers for the FHA require a more thorough investigation, and anything from chipped paint to missing handrails could curtail the entire process.
Brian Coester, CEO of a Maryland-based appraisal management company, said that the FHA's goal is to protect both the consumer and the buyer. As such, any lender should ensure that they are using quality mortgage loan software as they create any type of repayment plan.