Cost consolidation improves real estate loan shopping

Part 4: How do we fix our mortgage system?

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(This is Part 4 of a four-part series. See Part 1: Real estate settlement services take bite out of borrowers; Part 2: Eliminating mortgage lender fee surprises and Part 3: Mortgage brokers struggle with consumer distrust.) The three previous articles in this series advanced proposals for reducing the cost of settlement services provided by third parties, eliminating the escalation of lender junk fees at the closing table, and making mortgage broker compensation transparent to borrowers. This one is about making it possible for borrowers to shop effectively. Shopping is extremely difficult now because mortgages have so many price dimensions. Even if lenders paid for all the services provided by third parties, which I proposed in the first article, a borrower would have three prices to juggle: interest rate, points, and fixed-dollar fee. (On ARMs, there are more, but I'll ignore that for now). This is confusing and makes shopping difficult. The solution is to mandate one fixed...