Investors and new mortgage rules aiding housing recovery

Even with the Dodd-Frank act, lenders would still be wise to use mortgage loan software, ensuring that payment plans are within borrowers' financial abilities.

The housing market has been experiencing positive growth for several months now. For example, home sales are up and construction activity is rising. With these factors, among others, in place, lenders would be well-advised to invest in loan management software to ensure that the trend continues. Along with an amortization calculator, borrowers can hopefully avoid the possibility of foreclosure.

However, should borrowers still fall behind on their monthly payment plans, the Consumer Financial Protection Bureau (CFPB) proposed a plan that would create new mortgage disclosures for homeowners. The CFPB first launched the initiative last year, under the Dodd-Frank act. It's designed to streamline and outline specific guidelines the lending industry is required to disclose.

Called Project Catalyst, the program would encourage banks, credit unions and other financial firms to propose trial runs to the CFPB for the purpose of studying how best to deliver the new disclosures.

According to a CBS Moneywatch article, investors scooping up distressed properties has also helped the housing market move in a positive direction. Hedge funds, private equity firms and other investors looking for a better return on their capital have moved aggressively to buy single- and multi-family homes, as the prime interest rate is low.

Rick Sharga, executive vice president of Carrington Mortgage Holdings, a loan servicing firm, told the news source that the housing market is definitely in a recovery, with multiple factors at hand.

"All the metrics are pointing in the right direction – pending sales, sales of new and existing homes, price appreciation, and housing starts," he said. "Delinquency and foreclosure rates are both trending down. But it's not an explosive, booming recovery. It's a recovery in the sense that it's better than the horrible numbers we've seen over the past few years."