My New Blog

State of Denial II

January 21st, 2010 3:24 PM by DANIEL POULOS

I've got more ranting to do!

Well, the new RESPA guidelines have taken effect in the name of consumer protection. Unfortunately, lenders aren't yet sure of how to comply so, to err on the side of caution they are putting originator's through the wringer to get any loans closed. If the people who passed these new laws really understood the end effect they would make it illegal for them to serve as lawmakers.

Here's the real kick in the teeth. I understand that the general public is no match for those who would use every opportunity to prey on them and that the government must play a protective role. While no one was enforcing the rules already in place and due diligence and quality control took a backseat to misrepresentation and greed, unscrupulous mortgage originators and lenders got rich. Now those opportunistic predators are gone, the lenders remain supported by our tax dollars and who is left to suffer the wrath of overzealous lawmakers? That's right, the local mortgage companies that managed to weather the storm and continue to operate based on the reputations they spent years building as well as qualified families trying to buy new homes.

So now regulators come up with a new 4-page Good Faith Estimate of Closing Costs with many zero tolerance line items. It is strewn with mandated time lines that insure that mortgage lending cannot be done in a timely manner. To their credit the forms contain more plain English, but how many borrowers are going to take the time to read the new 68 page "Shopping for Your Home Loan – HUD's Settlement Cost Booklet". Booklet??? Are you kidding me?

Responsible mortgage brokers who have always clearly explained all options and disclosed all charges are used to having the borrower acknowledge that they understand the disclosures and attest to it with their signature. Regulators have decided that they are better at getting the information across with 4 page Good Faith Estimates and 68 page "booklets". But, get ready for this; the new disclosures don't have to be signed by the borrowers!

This is all to similar to the way that the Home Value Code of Conduct passed last year crippled the mortgage approval process, limited borrowers options and caused consumers to have to pay for multiple needless appraisals, but don't get me started on that again…

Posted in:General
Posted by DANIEL POULOS on January 21st, 2010 3:24 PM


and the govt wonders why there are in such a mess...they created the problem and now they are just complicating everything
Posted by Gabriel on January 22nd, 2010 3:45 PM


Danny: I feel your pain! Perhaps this is something 'else' that RPAC (Real Estate Political Action Committee) can add to their 'TO DO' list. Unfortunately this is precisely the type of thing that I have been concerned about all along: TOO MUCH GOVERMMENT!!!! No offence Danny, because I believe that you may have voted many of these people into office; but the Democratic Party has adhered to this 'prescription' for as long as I can remember ['Giving men fish, instead of teaching them how to fish (i.e.: government run health care, rising unemployment, massive deficits (forcing us to borrow money from foreign countries like China), huge government bailouts for corporate America-with such limited ‘common sense’ accountability that make the majority of the taxpaying Americans 'either fume with anger, or cringe/shutter/puke with disbelief (we haven’t even begun to pay for any of these brilliant decisions yet). If they (Palousy, Obama, and the Democratic House and Senate) had their way they would bulldoze their way forward with the first government-run health care package that they so ingeniously voted in. But I do hope that instead, they will pay attention to the message sent (loud & Clear) from the people of Massachusetts (with the election of Ted Brown), that this is NOT what the majority of American taxpayers want. Not that I am not upset with the decisions of the Republican Party while they were in office either, please!!! The blood and money being spent in the Middle East is also disheartening to me. I feel bad for C. Powel, because I believe he was 'made' to address the American people with that entire 'spiel' about the 'dangers of that little vile that he held in his hand' (you remember the one-weapons of mass destruction, bla, bla, bla). I think that we all fell into it because of what had happened on 9/11. I don't believe that we have any business being over there (our funds and lives could have done far more good in allied nations or territories). But they did get involved, and how can we just 'bail' now (jeopardizing our troupes and the innocent lives of the people who live there and in Afghanistan???) But don't get me started. It is all so upsetting. I just can’t even imagine the kinds of taxes our children and future generations beyond that are going to have to pay for all of this. Let’s just hope and pray that their (our wonderful government’s) solutions for that wont be as costly or as lame. What ever happened to common sense??? Oh well, sorry, but I believe you asked me what I thought. Take care Danny. Jill Stop the insanity! Whatta ya think about this, Jill? Well, the new RESPA guidelines have taken effect in the name of consumer protection. Unfortunately, lenders aren't yet sure of how to comply so, to err on the side of caution they are putting originator's through the wringer to get any loans closed. If the people who passed these new laws really understood the end effect they would make it illegal for them to serve as lawmakers. Here's the real kick in the teeth. I understand that the general public is no match for those who would use every opportunity to prey on them and that the government must play a protective role. While no one was enforcing the rules already in place and due diligence and quality control took a backseat to misrepresentation and greed, unscrupulous mortgage originators and lenders got rich. Now those opportunistic predators are gone, the lenders remain supported by our tax dollars and who is left to suffer the wrath of overzealous lawmakers? That's right, the local mortgage companies that managed to weather the storm and continue to operate based on the reputations they spent years building as well as qualified families trying to buy new homes. So, now regulators come up with a new 4-page Good Faith Estimate of Closing Costs with many zero tolerance line items. It is strewn with mandated time lines that insure that mortgage lending cannot be done in a timely manner. To their credit the forms contain more plain English, but how many borrowers are going to take the time to read the new 68 page "Shopping for Your Home Loan – HUD's Settlement Cost Booklet". Booklet??? Are you kidding me? Responsible mortgage brokers who have always clearly explained all options and disclosed all charges are used to having the borrower acknowledge that they understand the disclosures and attest to it with their signature. Regulators have decided that they are better at getting the information across with 4 page Good Faith Estimates and 68 page "booklets". But, get ready for this; the new disclosures don't have to be signed by the borrowers! This is all to similar to the way that the Home Value Code of Conduct passed last year crippled the mortgage approval process, limited borrowers options and caused consumers to have to pay for multiple needless appraisals, but don't get me started on that again…
Posted by Jill Wilcox-Fesl on January 23rd, 2010 1:05 PM


well said! What a crazy mess, that as of today needs a 57 page FAQ's to help the evil lenders understand how to complete this new form...
Posted by Richard Hartian on February 27th, 2010 11:10 PM
www.richardhartian.com


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