BluefoxToday blog : Senate housing bill on mortgage industry draws fire

Senate housing bill on mortgage industry draws fire

U.S. Senate has been working for a long time on a wide-ranging housing legislation that should spell a lot of relief to the battered mortgage industry. Their intentions are certainly sincere, but sometimes they just get too eager to find solutions, hoping to fix everything in a matter of months. Which of course is unrealistic. And they also tend to listen to people who call themselves experts when they really aren't. They are just lobbyists representing a segment of the market that is looking to benefit from the changes.

The latest draft now working its way through the U.S. Senate has energized several home loan trade groups to protest a couple of items on it. One of them would require mortgage lenders to essentially decide what type of a loan program is best suited for the borrower. That clearly goes too far. The originator's role generally is to consult with the client and explain in adequate detail different products and what their advantages and drawbacks are. The final call still ought to rest on the borrower's shoulders. He has to take responsibility for his financial actions and no on else. If the law passes, mortgage originators can start looking for competent legal advice as some clients will end up in foreclosure and blame them for it.

The other issue is about the national licensing system for mortgage brokers and loan originators. The trade groups would like to see the program run by the federal government and not by the current entities, the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, who have been working for years on a new setup. For it to be truly meaningful and properly enforceable, it should be under the federal umbrella. It would then be one streamlined set of rules and no more. Easy enough.

The trade groups voicing their concerns are the Mortgage Bankers Association, U.S. Chamber of Commerce, the Financial Services Roundtable, The Consumer Mortgage Coalition, the American Financial Services Association and the Consumer Bankers Association. Some seriously influential players among them.

 

_______________________________________________________________________________

Provided by: 

Esko Kiuru
Mortgage, real estate and apartment industry analyst 

www.BluefoxToday.com - syndicated mortgage, housing and property management blog

eskokiuru@gmail.com
My cell: 702-499-1006

Comment balloon 6 commentsEsko Kiuru • June 18 2008 12:02AM

Comments

Hi Esko, I think your right in that it shouldn't be up to the loan officer to pick the program but so many sell the product that suits them not the customer. BTW thanks for your response to my questions.

Posted by Virginia Lee about 10 years ago

Esko just another example of government taking the responsibility out of the hands of those who NEED to be responsible for their actions.  I wonder what genius came up with this idea, talk about opening the door for the sleaze bags to walk through and take advantage of borrowers, this would be it, not to mention what you brought up, the extra liability for those of us who plan to be around for a while.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) about 10 years ago

Virginia,

The home buyer should be responsible for choosing his mortgage.

Posted by Esko Kiuru about 10 years ago

George,

It's sometimes mind-boggling where they come up with these ideas. Fortunately the industry groups are fighting back.

Posted by Esko Kiuru about 10 years ago

Another big focal point is loan charges. The mortgage industry has set itself up as a big target, making it much easier for all the nonsense reform proposals to be easier to pass.

Things that would not have been considered can now be made part of sweeping reforms.

And sweeping reforms are coming.

Richard

Posted by Richard Byron Smith, NMLS #184479, Mortgage Loan Officer (Mortgage Loan Officer, Fairway Independent Mortgage Corporation NMLS #2289) about 10 years ago

Richard,

Let's see much the industry groups can influence the emerging legislation.

Posted by Esko Kiuru about 10 years ago

Participate