Fri Jul 23, 2:09 pm ET
By Ted Rood, Associated Content
Recent Capitol Hill rhetoric about greedy lenders and a Wall Street run amok implies all mortgage lenders are thieves and scoundrels.
NOPE, IT IMPLIES THAT TOO MANY ARE.
I'm insulted at the supposition that my clients are incapable of understanding mortgages, and that I am a predatory con man exploiting potential clients the moment they drop their guard.
I CAN NOT BELIEVE THIS PERSON WORKS WITH MORTGAGES AND CAN NOT SEE HOW THEY COULD BE CONFUSING OR MANIPULATED. AT THIS POINT I AM SUSPICIOUS THEY ARE FULL OF CRAP.
I've been a loan officer in the St. Louis area since 2000. I've worked as a loan broker and a loan officer for a regional bank (First Horizon Home Loans) and now as a mortgage consultant for MetLife Home Loans since September 2008. (These are my opinions -- not those of Metlife Home Loans, where I'm currently a mortgage consultant.)
Writing home loans is not a job to me; it is my vocation. Helping my clients save money and improve their financial situation brings me great satisfaction, at least when regulatory reforms don't delay my closings and confuse my clients.
THAT'S GREAT, BUT IF THEY ARE SUGGESTING THAT NOBODY ELSE IS IN THE BUSINESS JUST TO MAKE A BUCK, HE HAS NEVER TALKED TO ANYBODY ELSE IN THE BUSINESS.
My job seems fairly straightforward: I look for clients who need to refinance or buy a home. I work with them to find a mortgage that fits their needs and then guide them to closing.
It's not quite that easy, however.
Recent federal mortgage reforms have changed lending in America. The most current legislation, the financial reform legislation signed into law by President Obama on Wednesday, will certainly affect the mortgage business, too.
We are regulated on when and how we can order and deliver an appraisal. The new "improved" three-page good faith estimate fails to show the most critical aspects of a mortgage: the monthly payment and the cash due at closing.
YES, THE APPRAISAL RULES ARE TO STOP THE ARMY OF BAD APPRAISALS THAT PUSH UP HOME VALUES INTO A SPECULATIVE BUBBLE THAT WILL AGAIN BURST. I HAD READ THAT THOSE CRITICAL ASPECTS WERE A PART OF THIS SO I WILL HAVE TO CHECK ON THAT ONE. CONSIDERING THOSE WERE SOME OF THE PRIMARY REFORMS, I FIND IT HARD TO BELIEVE, BUT WILL GIVE THE BENEFIT OF THE DOUBT FOR NOW.
The legislation signed by Obama this week -- the Dodd-Frank Wall Street Reform and Consumer Protection Act (H.R. 4173) -- takes an already convoluted loan process and adds more layers of uncertainty and regulation. It outlaws mortgages with prepayment penalties and stated income, but those loans haven't existed for several years. Lenders will spend untold hours examining rules not yet written by unelected bureaucrats.
LOANS WITH PREPAYMENTS HAVE NOT EXISTED FOR YEARS? THIS IS THE FIRST OUTRIGHT LIE. I WAS INTERVIEWING VICTIMS OF PREDATORY LENDERS JUST A YEAR AGO AND THEIR DOCUMENTS SHOWED PREPAYMENT PENALTIES. THIS IS SUCH A BALD FACED LIE, I NOW BELIEVE THAT THIS ENTIRE DOCUMENT IS PROBABLY FALSE.
Loan officers will see incomes altered dramatically. Commissions paid by our employers may be reduced, requiring higher closing costs to our customers. Dodd-Frank's stated intent was to protect consumers; the reality is they will end up paying more in many cases, especially on loans less than about $100,000. In the past, loan officers could structure these loans to make them profitable without necessarily charging customers origination fees.
HOW DO THEY LOWER CLOSING COSTS? BY JACKING UP THE RATE OR ROLLING IT INTO THE ENTIRE LOAN AMOUNT. WHEN THEY DO THIS, THE HOME BUYER ENDS UP SPENDING MANY TIMES MORE THAN THE CLOSING COST WOULD HAVE BEEN. FURTHER, THIS LAW WAS PUT IN TO STOP LENDERS FROM PAYING THEIR MORTGAGE PEOPLE BONUSES FOR JACKING UP RATES AND FEES.
Those days will end soon, and these borrowers (if they can find a lender willing to do their loan) will either pay more at closing or add more costs to their loan. Borrowers who don't could be stranded.
I don't like making less money. Neither do I like charging customers more money. The very worst part of Dodd-Frank, however, is not what we know now; it's what we don't know yet. The new Bureau of Consumer Financial Protection will have the power to enact more reforms on an industry already paralyzed.
TRUTH IS FINALLY IS RIGHT THERE, "I DON'T LIKE MAKING LESS MONEY". THIS AUTHOR SAYS ANOTHER TRUTH, THAT HE DOESN'T ACTUALLY KNOW WHAT THESE REFORMS WILL DO. I LIKE HOW HE INSINUATES THAT IT IS REGULATIONS THAT HAVE "PARALYZED" THE MORTGAGE INDUSTRY AND NOT THE GIGANTIC HOUSING BUBBLE THAT NEARLY CAUSES A SECOND GREAT DEPRESSION.
I'm not quite sure how to plan my business around that. I am certain, however, that small lenders will continue to vanish, unable to cope with the administrative costs of constant reforms, leaving the consumer less choice and higher costs.
Content provided by Associated Content from Yahoo!
WHATEVER DUDE. NOTICE HOW HE OFFERED UP NO ALTERNATIVES TO DEALING WITH THE GIANT MESS HIS INDUSTRY IS IN? THAT IS A SIGN THIS GUY JUST DOES NOT LIKE ANY RULES OR LAWS ABOUT ANYTHING. ANARCHIST, LIBERTARIAN, OR WHAT?