Mortgage disclosure rules are changing. The old rules were that you didn’t really know the fees until you got to the closing table. You got an estimate but things could be added and adjusted at the last minute. In some cases you really don’t know until the last minute and this variability is legitimate. Of course brokers and lenders took advantage of this and added extra fees at the last minute that most people had no choice but to go along with.
Then the rules were changed to say that a borrower had to be disclosed with good numbers at least 3 days before the closing. Now we are getting somewhere. The idea is to give the borrower a chance to review the numbers with enough time to back out without the pressure of closing weighing into their decision.
Now they are turning all of this on it’s head. The new rules say that a broker or a lender has only one opportunity to disclose the loan. The fees cannot change from the first disclosure. The governement strikes again.
There are a tremendous number of very valid reasons that the fees and costs of the loan can change during the process. In my opinion, this rule makes no sense. I guess you could call it “too much of a good thing”. Everyone needs proper checks and balances to prevent the occasional temptation to cut a corner here or there but this is crazy.
My thinking is the the consumer simply needs more education on the mortgage process. If you understand what is going on and what the factors are you are able to make good decisions. The process becomes a partnership between the originator and the borrower. If the ignorance mistakes were removed from the the mortgage origination process, most of the unpleasantness that we have seen in previous years could have been avoided.
We have been talking about the issues with the FHA. Here is a good article from the Boston Herald that goes through all the details. Quite frankly, something had to give. The FHA was in 3% of the market just a few short years ago and now they are up to 30%. The number of dollars involved is staggering. Their balance sheet is also coming in way below the congressional mandates. It is looking like they will attempt to get things shored up but increasing their fees.
It sounds good but I don’t think they are even going to come close with all of this. If I were a betting man I would put my money on the fees going up and then they will reach out to Uncle Sam (the taxpayers) for an infusion of cash. You heard it here folks.
“The Obama Bow” made a lot of news lately. The responses seem to range from “no big deal” to “I can’t believe he did that”. I am on the “can’t believe he did that” side and it made the hair on the back of my neck stand up. How about some common sense here. Who on God’s green earth doesn’t know that bowing in a situation like that is an acknowledgment of submission. It is no different than an dog rolling over on his back to another dog. I saw that and immediately thought that Obama just rolled over on his back. Does this man represent YOUR America?
I came across a terrific post by Bob Bauman regarding the history of the kowtow. It appears that the first westerner to refuse to kowtow was John Elliot Ward when visiting the Chinese emperor in 1859. No western leader has bowed since – well, until Obama. The article is a great read and pretty short. It is nice to have the history.
I am dumbfounded with what is going on with the entire health care reform. I can’t even believe the brain surgeons in the hallowed halls of congress and the white house could even say with a straight face that this monstrosity is going to accomplish anything positive. Then they have the nerve to tell us that it is not going to send the debt in the stratosphere. Frankly, it is insulting that these fools think that we are so stupid.
The bills are thousands of pages, rolled out from a secret room where no one can see, rushed through and the vote is set for Saturday night – again. What happened to transparency? C’mon. I don’t know about anyone else but I am getting pretty frustrated with the out of control spending and the rush voting. If it is so wonderful, why can’t we take our time and make sure that what we are doing makes sense.
