HUD won't withdraw proposed RESPA rule changes

Submitted by chis eliopoulos on August 20, 2008 - 1:35pm.

HUD "has been listening hard to all of the stakeholders in this process, and intends to strike a proper balance among their concerns," Greenwood said.

BLA BLA AND MORE BLA
All these people are giving lip service to each other and finally to the rest of us.

"But the Fed and industry groups want HUD to develop a single disclosure form that complies with not only RESPA, but the Truth In Lending Act (TILA), so consumers aren't subjected to "information overload."
What does the above really mean? NOTHING absolutely NOTHING

CHANGE THE BANKING RULES if you dare, you paid cowards.
Stand up to the BANK lobby throw them out and things will change.
I'm so sick and tired from the politics of the whole thing and I do not really want to have to bail the banks out every ten years.

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Submitted by John Toepfer on August 20, 2008 - 2:58pm.

I see nothing wrong with full disclose of loan terms and limitations and the commissions and fees associated with establishing a mortgage.

Unfotunately, this will not take place with the new rules. It actually does not take place now. The broker's and agents in my office MUST disclose all fees on the GFE to a prospective client w/in 3 days of application. This, most importantly, includes an origination fee(if any) the lender paid Yield Spread Premium, and title/recording fees. If ANY compensation is being paid to the broker via the YSP, it must be disclosed. If a client were to go to a retail branch of a bank, say Wells Fargo, BofA, etc, that loan agent need NOT disclose any compensation he/she receives from originating the same loan. The new rules would not change that; either. Therefore, when comparing the two scenarios, and the consumer sees that the broker is receiving a YSP from the lender; that makes the Retail loan officer's offer appear better, when it in fact is not. they just don't need to disclose how much and where they derive their income

There are several aspects of the newly proposed rule that I find frightening. They wanted to rule out lender paid YSPs completely!

Frankly, ruling it out altogether would be unfair to the broker and the consumer. With the typical single family home 3/2 in my town hovering around 1.5-1.8 million, that would put quite a burden on the purchaser or owner if refinancing. Just think, if you wanted to refinance your loan of 1.5 MIl... 1% commsion (always negotiable, but industry standard - just like a Realtor 3-6% fee) and title and other closing costs of, say, 5K. 20K from the borrower at the closing table. 6-12 months down the line, we see a refinance market start to appear, allowing the borrower to significantly reduce their interest rate. Well repeat that process again. Sorry Mr. & Mrs Borrower, the lender paid YSP is no longer available; you will need to cut a 20K check again at the closing table.

In the SF Bay Area, home prices are much higher than the rest of the nation. Most consumers understand the benefit of the YSP in that, while it is a slightly higher interest rate, they get out the door with no closing costs or commisions, hence No Point, No Fee loans.

What we really should be focusing on, and they are not, because I don't think they fully understand the industry or the products available, is generating simple, one page forms that must be explained to borrower and signed by all explaining the full details of the loan.

Neg Am loans should require a simple breakdown and example of what happens when you make a certain payment. If you make the minimum payment for 12 months, you have not covered the entirety of the the required interst payments; therefore, in month 13, you balance may be as high as $xxx amount. 5 year interest only loan - here are your payments for 5 years, at the end of five years you still owe the same amount, and if the loan did not have an extra 5 years of I/O payments, here are your payments for the next 25 years.

Frankly, I don't see what is so puzzling about adopting, across the board for all lenders and brokers, simple and understandable disclosures. I guess we have to spend the next year or so listening to the media and politicians rant aobut the current crisis and who is to blame.

I liked it better when the media focused on Pitbulls and how all across the nation, people were being attacked by these "beasts"; I guess nothing sexier has come along.

BTW, if you don't understand the terms, don't sign the forms. Ignorance is no excuse of the law.

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Submitted by Bruce Hahn on August 20, 2008 - 3:14pm.

American Homeowners Grassroots Alliance

We are delighted that HUD has finally decided to stand up to these legislators, who have been duped into fronting for segments of the mortgage lending and other real estate services sectors whose practices have created the current housing crisis. It is time to stop bowing to the efforts of these businesses to preserve as many of those unethical practices as possible.
If Congress and the various regulators who have oversight responsibilities for mortgage lending and other real estate services sectors had done their job in the first place, millions of American homeowners would not be victims or future victims of foreclosure.
While many of the 70 million+ U.S. homeowners have lost their homes to foreclosure or are risk of losing them, they have not yet lost their right to vote. Let's hope the media as well as the candidates opposing the 244 members of Congress who signed this letter make sure that all homeowners and other voters in those 244 districts are aware of the incumbent's bad judgement in cosigning this letter.

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Submitted by chis eliopoulos on August 20, 2008 - 4:49pm.

To Bruce Hahn

"While many of the 70 million+ U.S. homeowners have lost their homes to foreclosure"

You mean to tell me that all these people were "confused" or had no idea what they were getting in to? Or they were victims of unregulated illegal lending practice?
Is there something in your opinion that will have saved these people's homes by making them NOT TO TAKE out these loans?
Please give it a brake.Every one wanted a piece of the action and when the chips failed they are screaming foul.

And by the way which kind of reality is that some one with 10% or 20% equity has home ownership?
NO ONE IS OWNER OF ANYTHING UNTIL HE OWNS IT 100%.
The rest of them are in a partnership with the loan holder,who happened to be the majority partner.

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Submitted by John Toepfer on August 20, 2008 - 5:05pm.

Well North Carolina Outlaws YSP - corruption is not dead.

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North Carolina's governor signs a ban against YSP into law. If anyone on the GA committee is curious what group would be behind the bill and the law, that would be the Center for Responsible Lending which put out the press release below a few days ago.

Note the similarity in languaging regarding YSP in the Originator Times item, which you quoted, and CRL's: "essentially kickbacks that brokers routinely receive on subprime loans for steering a borrower into a higher interest rate than the lender has set for the loan." You and I and everyone on the committee will recognize that this is a complete mischaracterization of YSP, twisted for CRL's political purposes. What does "higher interest rate than the lender has set for the loan" mean? It's nonsense and CRL knows it, but sells in North Carolina and it sells in Sacramento.

In North Carolina, mortgage brokers will no longer be able to offer low-cost/no-points loans because YSP is outlawed. Only banks will be able to do that. CRL, headquartered in North Carolina, operates a bank with a $750,000,000 mortgage portfolio. Do they originate mortgages, too? Oh, yes, and they just eliminated a lot of their competition.

They'd like to do the same here and in fact have targeted California, along with a handful of other states, for implementation of their very coherent and consistent agenda. CRL's frequent press releases and website statements set forth their program and strategy in no uncertain terms. Committee members who've been following and fighting legislative action in Washington and Sacramento may recognize CRL's fingerprints onAB 1830, SB 1053, and sundry other bills, as they were introduced in the legislature.

RALEIGH, NC - North Carolina Governor Mike Easley signed House Bill 2188 - which eliminates rate or yield spread premiums - into law. North Carolina is the first state to ban yield spread premiums.

While the bill was conceived with good intentions, the legislation may actually hurt the industry by discriminating against small businesses and limiting choices for consumers.

Supporters believe that yield-spread premiums encourage brokers to charge higher fees, with no additional benefit to the homeowner because they are essentially kickbacks that brokers routinely receive on subprime loans for steering a borrower into a higher interest rate than the lender has set for the loan.

Critics say yield spread premiums allow mortgage brokers to offer loans with reduced or no closing cost loans and help consumers by spreading out fees over the life of a loan.

The bill was sponsored by Reps. Dan Blue and Walter Church. The law becomes effective October 1, 2008.

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Submitted by Matt Carter on August 20, 2008 - 5:06pm.

John, this story did not get into the particulars of the proposed changes to RESPA -- here are some links for those who aren't up to speed -- but it's not the case that HUD would rule out the use of YSPs. HUD's proposed GFE would require that YSPs be applied to the borrower's closing costs, so that those who want to pay a higher interest rate to get back money up front would be able to do that without mortgage brokers pocketing the money without their knowledge. Jack Guttentag has done a three-part series looking at this and other aspects of the GFE. Start with Part 3 if you are interested in his take on how HUD proposes handling YSPs. Chris, the Fed is also proposing changes to the rules governing lenders, and those changes have become part of the RESPA reform debate. The Fed says consumer testing showed that disclosing YSPs only confused consumers and prevented them from choosing the best loan. HUD says it's perfected a GFE that's been consumer tested and proven to be an effective comparison shopping tool. Industry associations and now Congress have seized on the Fed's decision to back down on plans to require mortgage brokers to enter into written agreements with borrowers before collecting YSPs as part of proposed Reg Z changes for implementing the Truth in Lending Act (TILA). They want the Fed and HUD to come up with a single set of disclosures for RESPA and TILA. But that may be easier said then done, because HUD and the Fed don't see the world exactly the same way. HUD, which has been looking at the entire closing process (rather than just loan disclosures) for years, is taking an approach it says will help consumers comparison shop for a complete loan package, including settlement services like title insurance. HUD says it wants to create competition by providing incentives for lenders to package settlement services with mortgages. That's going to help consumers shop around and force settlement services providers and loan originators to cut costs, HUD maintains -- that's where that $8.35 billion a year in savings number comes from. Many state regulators and consumer advocates say borrowers pay too much for settlement services because they don't bother to shop around, and just buy whatever their lender or real estate agent recommends (without realizing the person making the referral may be getting a cut through an affiliated business or other arrangement). You could argue that the industry, by pushing for HUD to simply work with the Fed on a uniform loan disclosure (and how can you be against that, right?), is essentially saying forget about all that packaging stuff and competing for business by marketing to consumers, let's just continue doing business as usual. The industry now has a majority of the House on their side.

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Submitted by Lenn Harley on August 21, 2008 - 3:57am.

We have real estate brokers offering mortgage and title services to home buying consumers and they create a RESPA nightmare little understood by the public.

Now HUD would change the rules so that mortgage originators could package title insurance in with loans??

How many ways can we spell conflict of interest. HUD says it will save over $8Billion a year for the consumer. I believe it will simply shift the profits from title insurance from the title companies to the lenders.

Since title insurance is the profit center for title companies and most other services are "pass through" or loss leaders (conduct the settlement and examine the title), what incentive is would there be for an attorney to offer title services?

If the HUD proposals succeed, are the loan originators going to provide settlement services as well as offer title insurance??

Title services should not be offered by real estate companies, loan originators or any entity except title companies. All the HUD proposed change would do is shift profits from title insurance from title companies and real estate companies that own title companies to the mortgage originators.

Or, is this a gift to the real estate companies that also own mortgage companies?

Consolidation doesn't always mean savings for the consumer. Often, as in this case, it appears to simply mean "moving the profits from one industry segment to another".

Lenn Harley
Broker
Homefinders.com
http://www.homefinders.com

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Submitted by Diane Cipa on August 21, 2008 - 6:08am.

I love HUD.

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Submitted by Matt Carter on August 21, 2008 - 8:20am.

Lenn, HUD's savings estimates are based on the premise that if consumers are able to go to 3-4 loan originators, and see the cost of a total package -- mortgage, title insurance, and other settlement services -- they will pick the package that's the best deal for them.

That would in turn motivate loan originators to not only trim fat out of their own pricing, but to work with the settlement services providers with the most competitive pricing (instead of the ones that they have formed joint ventures or have marketing agreements with).

The rules already allow this, by the way, but it's not always clear to folks how far they can go without running afoul of RESPA. And if consumers don't have a GFE that lets them compare the total package (loan plus settlement services), then it's harder to demonstrate you've put together a better deal.

HUD wants to make the GFE a better tool for comparison shopping, and create additional incentives for packaging such as allowing loan originators to cost average and negotiate volume discounts for settlement services.

You have put your finger on a possible unintended consequence: if loan originators have that much control over the process, smaller settlement services providers (and lenders) might be at a competitive disadvantage. You might see a lot of consolidation, and end up with less competition in the end.

But HUD expects that if the proposed RESPA rule changes go through, you would see third party companies putting together packages of settlement services and marketing them to loan originators and consumers, which would help smaller players stay competitive.

Rather than moving profits from one industry segment to another, HUD sees everybody who is currently benefiting from the lack of competition taking a hit.

HUD actually thinks loan originators will take the bigger hit, losing as much as $5.88 billion in revenue a year (treatment of YSPs, discussed above, is a big part of that).

HUD estimates settlement service providers would see a $2.47 billion reduction in annual revenue. Title and escrow companies would take a $1.79 billion hit, with the remaining $680 million coming out of the pockets of other third-party settlement service providers like appraisers, surveyors and pest inspectors.

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Submitted by kevin renfro on August 21, 2008 - 9:04am.

It is a poor rule. That is why the whole industry and Congress are both against it. It is simply packaging re-packaged. Furthermore, it flies in the face of what HUD said it would do at the roundtables, which is reach a consensus among industry members. The only consensus that seems to be reached is that all parties oppose the rule!

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Submitted by Diane Cipa on August 21, 2008 - 11:25am.

The more credible and clear information gets into the hands of consumers, the better they can make their own decisions.

The proposed RESPA rule effectively tears down the wall of the referral network and I say yahoo!!

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Submitted by kevin renfro on August 21, 2008 - 11:33am.

I hope you are right, but I fear you are wrong! The packaging aspect of this alone should lead to its demise.

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Submitted by Matt Carter on August 21, 2008 - 4:49pm.

Kevin, if you go back and look at what the industry was asking from HUD after HUD withdrew its original RESPA reform proposal (which included a much more explicit "Section 8 exemption" to allow packaging), HUD probably thought it had reached a consensus this time around, at least with realtors and lenders. A June 1, 2006 letter from the National Association of Realtors included recommendations that look remarkably like the proposal HUD finally came back with nearly two years later. NAR asked HUD to: "1. Revise the Good Faith Estimate (GFE) to Ensure Certainty and Simplicity: HUD should provide for an early, firm and clear GFE, synchronized with the HUD-1, to provide certainty and simplicity for borrowers early in the process. This single step, which can be accomplished fairly quickly, will do more to achieve the aims of RESPA reform than any other, without introducing unpredictable effects into the real estate finance marketplace, or picking industry winners and losers through regulation. 2. Encourage Packaging without a Section 8 Exemption: HUD should discard the proposal for a Section 8 exemption to facilitate packaging. The marketplace has already begun to respond vigorously under current law to offer bundled services. Current law permits packaging but requires that 100 percent of any discounts created by bundling services be passed on to the consumer. The Section 8 exemption would remove the requirement that savings accrue to the borrower and would be a step backwards for the goals of RESPA reform. NAR specifically opposes a Section 8 exemption for so called "volume based" discounts. A Section 8 exemption for volume based discounts would allow the provider of services, rather than the consumer, to pocket the savings. Instead of permitting Section 8 exemptions, HUD can encourage packaging by studying and publicizing different market-based approaches to bundled services." (See page 15 of this package of materials from a Dec. 14, 2007 meeting NAR held with HUD officials). A month later, the Consumer Mortgage Coalition -- that's big lenders like Washington Mutual, HSBC, and Wells Fargo -- met with HUD and basically said a Section 8 safe harbor would be nice, but HUD could compromise by offering "more narrowly tailored exemption(s)" to encourage packaging, including the ability to cost average and negotiate volume discounts. "As was demonstrated by the diverse view of industry and consumer groups at the roundtables held by HUD in the summer of 2005, reform of RESPA's Section 8 requirements, particularly a broad-based packaging approach with a total elimination of Section 8's prohibitions, is highly controversial," CMC said. "Lesser steps that would bring some measure of competition, but are short of full packaging, may include clarity on the permissibility of average cost pricing, or a more narrowly tailored exemption for volume discounts, which could include a more narrowly drawn definition of what a 'discount' means under RESPA." (See page 12 of materials CMC brought to Jan. 16 meeting with HUD) You can argue that the four-page GFE HUD came up with is too complex, but remember HUD is trying to accomplish more than just making the loan terms clear. The goal is to enable consumers to compare competing offers for a loan and all the settlement services they'll require (see discussion above), while giving them the option to buy those services individually themselves, and/or as part of a package offered by a loan originator, settlement services provider, or third party. Maybe that's too tall an order, but HUD says they've tested the GFE with consumers and that consumers can use the form to figure out the best deal. Can you say that about the way the process works today? When it comes to packaging, HUD is no longer proposing a Section 8 exemption. In other words, businesses would still be violating RESPA if they did not pass savings on to consumers. So, are they not proposing pretty much what NAR (and CMC) asked for -- a "'market-based (approach) to bundled services" without a Section 8 exemption? It's interesting that the argument that RESPA reform opponents are emphasizing now -- that HUD should work with the Fed to come up with a single disclosure form that meets RESPA and TILA (Truth in Lending Act) requirements -- has only recently come to the forefront. That the Fed is making the same argument carries a lot of weight. But it's clear that opponents of HUD's proposed RESPA rule change also want to ditch the incentives for packaging and everything not related to disclosures. The main argument for doing so in the latest Hinojosa-Biggert letter is that these ideas "have not previously been the subject of public comment and cover a number of subjects beyond disclosures." That's an argument you might make in asking HUD to extend the public comment period, as HUD did in May at Hinojosa and Biggert's request. But it's hard to get a handle on why that's also an argument for throwing out the whole proposal with no further discussion, especially when you look at all the input the industry has had in the process to date and consider the leeway HUD still has to rework its final rule in light of the thousands of comments it's received. The industry has put forward many more detailed arguments against HUD's packaging incentives that boil down to this: HUD has overestimated the benefits to consumers, underestimated the impacts on the industry, and that taken as a whole, the proposed changes to RESPA will do consumers more harm than good. Those arguments should be addressed. But industry critics -- and members of the House who signed the Hinojosa-Biggert letter -- don't want to hear HUD's response to their criticism, they just want HUD to scuttle the whole proposal now. By moving forward with the process, HUD is saying let us respond to the points that have been raised in opposition, and see if we can put out a final rule that addresses them. Given all the work that everybody on all sides of the issue have put in to get to this point, does HUD not deserve the chance to respond and put forward a final rule?

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Submitted by kevin renfro on August 22, 2008 - 2:51am.

By removing volume discounts from the defintion of items covered under section 8, HUD has effectively given large lenders a section 8 exemption. I believe that is what everyone is up in arms about. If you read HUD's comments, that is what it intended to do to promote its packaging agenda.

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Submitted by Matt Carter on August 22, 2008 - 8:13am.

HUD maintains there is no explicit Section 8 safe harbor in the proposed rule changes. If you are cost averaging or negotiating volume discounts, you must pass savings on to consumers. In 2002, HUD was proposing a Section 8 safe harbor from RESPA for all parties participating in a package offer from charges of illegal referral fees, kickbacks and unearned fees. From P. 17-18 of HUD's impact analysis (xi and xii in printed document): "HUD did consider the option of offering a Mortgage Package Offer (MPO, or single packaging) with a Section 8 safe harbor in combination with the proposed GFE. HUD rejected this alternative for several reasons. First, HUD included tolerances in the proposed GFE, which will encourage lenders to negotiate with third-party providers in order to reduce their costs. Second, this proposed rule encourages volume discount arrangements (one of the cost-reduction features of single packaging), which will also lead to more competitive third-party prices. Third, the proposed rule allows lenders and other service providers to average cost price (another cost-reduction feature of single packaging). Fourth, the proposed GFE itself is a much improved shopping document over the existing GFE; for example, individual fees are consolidated into broad categories and a summary, first page provides the shopper with key information to select the least expensive loan package. Thus, the proposed GFE already includes many of the cost-reducing features that would supposedly be offered by packing. Finally, this is all accomplished without having to offer a Section 8 exemption to the industry." More background beginning on p. 199 (page 3-60 in printed document) Discounts. HUD interprets RESPA to expressly allow discounts to consumers. The practice of obtaining discounts, including volume-based discounts, may serve to reduce prices to consumers because loan originators, or other settlement service providers, would negotiate a settlement service price possibly based on providing the settlement service provider with a stream of business. Such arrangements are not contrary to the purposes of RESPA and do not violate section 8 when any and all pricing benefits are passed on to consumers in the form of prices for the discounted services that do not exceed the discounted price paid. In the 2002 proposed rulemaking, in the context of loan originators being subject to tolerances for their GFE estimates of settlement service charges, HUD recognized that tolerances would provide incentives for loan originators and others not already doing so to seek to establish pricing arrangements with specific third party settlement service providers in advance, in order both to ensure they are able to meet the tolerances and to ensure lower prices for their customers. As part of negotiations for such arrangements, many originators would seek discounts from third party providers. However, because Section 8 of RESPA broadly prohibits providing a "thing of value," which is specifically defined to include discounts, in exchange for the referral of business, many loan originators and others have been reluctant to openly seek such pricing benefits, even where any such discount in the price is passed on to the borrower. As stated in the proposed rule, HUD believes that the fundamental purpose of RESPA is to lower settlement costs to borrowers, and it is therefore contrary to the law’s objectives to interpret the anti-referral fee provisions of Section 8 to prohibit one settlement service provider obtaining discounted prices, as long as the borrower is charged no more than the discounted price paid to the party discounting its price. Average Cost Pricing. The use of transaction specific prices for third-party services can present problems in the context of volume based discounts. If tiered pricing were used, the loan originator, for example, would like to know in advance which tier of the pricing mechanism the service provided will be using, the lower or higher. But that might not be determined at the GFE stage. Even without tiered pricing, a loan originator might not know which specific provider will perform a service required for the loan. The expected appraiser might be overwhelmed with work and not be able to perform the work in time for the settlement. The preferred title company might stop doing refinances during a particularly busy purchase period. In general, a more costly alternative than originally anticipated might be used to satisfy the borrower’s wants for a closing by a certain date. Average cost pricing takes care of both of these situations, tiered pricing and different prices among alternative providers. But it has additional advantages. With transaction specific price requirements, all individual prices must be precisely tracked and assigned properly to each borrower. If there are any changes, these must be noted and changed for all the records that will be the source of the HUD-1 entries. Inadvertent tolerance violations might occur if the increase in prices is large enough. Average cost pricing also has the advantage of eliminating the need to precisely follow each exact price for every service. GFEs can be filled out with the average as permitted by the Department. HUD-1s can be filled out in the same way. Borrowers get charged no more than what they were told at the GFE stage. Providers collect what they expected to get. On average, this would be acceptable to the party charging the average. Sometimes the individual price is higher, sometimes lower, but it averages out in the end. If that were unacceptable to the loan originator, for example, they would not utilize average cost pricing. Another consequence of average cost pricing is a reduction in internal administrative costs that results from the elimination of the need to follow who does what and for what price for every third-party service associated with the loan. The end result is that the cost of filling out a GFE is reduced, internal costs are reduced, and the cost of generating HUD-1 figures is reduced. So there are savings in compliance costs and internal costs. Competition will create pressure for these savings to be passed on to borrowers. Lender comments to the proposed rule of 2002 and discussions during the RESPA Reform roundtables in 2005 continued to cite a need for a complete exemption from Section 8 before lenders could seek discounts, including volume-based discounts, and to utilize average cost pricing. In advance of that proposal, HUD had determined that in order to fully develop the potential to reduce closing costs, loan originators would need to be able to seek discounts, including volume-based discounts, and to utilize average cost pricing. The proposed rule relies on adapting the GFE requirements to broaden the mortgage lending and settlement services marketplace, without a need for specific packaging proscriptions and requirements or a section 8 exemption. HUD believes that no such exemption is necessary in order to permit discounting, including volume based discounts and average cost pricing. Rather, HUD has determined that RESPA provides enough flexibility to permit a variety of approaches to fee calculations, such as volume-based discounts and average cost pricing, so long as they do not unnecessarily increase fees charged to the consumer. During the 2005 RESPA Roundtables, some loan originators and third-party settlement service providers also took the position that neither a full Section 8 exemption nor formal authority for packaging is needed. These providers believed that development of pricing mechanisms, such as discounts, including volume based discounts, and average cost pricing, could promote lower prices. This proposed rule would obtain the benefits of discounts, volume based discounts, and average cost pricing in the GFE context without the need for a Section 8 exemption.

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Submitted by kevin renfro on August 22, 2008 - 9:10am.

Isn't the problem with a final rule is that it is a FINAL rule? If HUD really does make revisions to the rule, should the industry and Congress not have the ability to review and comment on the revisions before it becomes final? I still have major problems with the packaging aspects of the rule, as does the industry and apparently Congress.

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Submitted by Matt Carter on August 22, 2008 - 9:30am.

As a "major rule" change, the final rule would not take effect for 60 days and only if Congress chose not to exercise its power to overule HUD.

HUD is saying at least wait until we respond to the comments we've received and see how we deal with them in a final rule before you throw out 6+ years of work on the issue.

If the final rule is adopted, HUD proposes a 12-month transition period where settlement services providers could either play by the old rules or the new ones.

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Submitted by kevin renfro on August 22, 2008 - 9:32am.

I can agree on that. But I would contend that HUD's track record for the six year period is not good!

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Submitted by Jeff Kershner on August 25, 2008 - 7:32am.

I love the way they make it sound like information overload. Most refinance loans take 4 weeks to complete. So that is 4 weeks to read and understand what you are doing as a borrower.
Now during the process the borrower is going to talk to most likely his accountant, HR dept, attorney, appraiser, neighbor, friends and family
All of whom have opinions and usually interject their two cents. Then there is human nature to take more then one needs.
This in my opinion is more then enough time to understand what you are getting into. The borrower needs to take responsibility for what they have undertaken. The truth of the matter is the increase in all other house hold expenses due to oil prices and the economic down swing.

I haven been in the mortgage industry for 13 years. The problem is that the investors that wanted to streamline the process and make it like ordering groceries on the internet ruined our industry and helped kill the economy.

It always amazed me when i client told me my cousin or Joes wife at work does mortgages I am going to use them they are giving me a deal.
Meanwhile that originator unwittingly or wittingly looked out for where they will profit the most and not there borrower’s best interest at heart.

I am all for making the GFE an easy to read document. But let’s get some legislation in regards to the one stop shops to break these monopoly type businesses. There are many of the larger reality films that push there in house companies. I am not against cross marketing but when they are all getting a piece then they should have some stronger rules in place in regards to the aftermath.

This is just my two cents.

Jeff Kershner

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Submitted by Bruno Skopinich on October 2, 2008 - 3:34pm.

Consumers STILL Do NOT understand APR! Many of my buyers think APR is the interest rate.

And I bet you... most Realtor do not understand the difference between APR and the interest rate on a mortgage.

Why does HUD think going to 4 pages from (1)One Page will help the consumer! Directors of HUD ought be required to work and earn their living for several years in the industry before they work at HUD to regulate IT!

(WE are from the Govt and we are here to help you:)

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