As a leader in the Florida Mortgage Broker Business we feel it becoming one of the most important factors to our mortgage and real estate clients.
Our industry is struggling through a several year process of implementing new rules and regulations passed way back in 2008. You can learn more about regulations at the NMLS and NMLS consumer websites.
I thought it would be a good idea to focus this article on how all of this is affecting the home mortgage lending consumer, conditional loan approvals (loan commitments), mortgage closing costs….
The bold statement of Transparency in lending to me really means ” The customer is easily able to understand the fees associated with the loans they are signing for”. Being active in the mortgage brokering business and real estate investing businesses for about 20 years now this is something that has always bothered me.
I see borrowers nodding their heads in agreement and understanding as they sign off on the Truth in Lending Disclosures (TILA – kits) and other mortgage loan applications and documents. Knowing they are just taking a leap of faith and trusting we will deliver a good loan with fair and reasonable fees in the end.
I never thought I would say this but as much trouble as it has been to adopt and implement these new consumer mortgage rules and strict 10% or even no tolerance on certain sections of the Good faith estimate, When compared or matched up against the HUD at or just prior to closing. I never though I would sort of agree that we might be headed in the right direction towards helping the borrower understand what they really need to know and understand when shopping for and closing a home mortgage in 2013 and beyond.
At C & C Financial Services we believe in keeping this simple and transparent. A tough task with some lender disclosure packets exceeding 100 pages of red tape documents.
I find my self giving this little presentation to our team members often so they can better explain to the client what they need to know so they can choose the right mortgage lending company and best mortgage loan product their family’s situation now and into the future.
Many lenders use the future as a sales tactic to confuse consumers implying and providing loan comparisons – if you refinance now you will save hundreds of thousands in interest, then slip “over the live of the loan” comment in there somewhere along the line. This tactic is very misleading to the refinancing borrower mostly. Remember most original loans are only kept for about 7 years or less. Very few people even bother paying off mortgages any more by making 180 to 360 equal payments, mostly they just keep borrowing with mortgages right through retirement. Some consumers even convert their forward (regular) mortgage into a Reverse Mortgage loan for seniors. It’s become customary to be fully mortgaged into your death. The your estate (family in most cases) has to settle up or let go of the mortgaged property about a year after death.
Many of us who previously abused or over-used credit are of the opinion that we should teach people how to pay off mortgages and get out of debt by retirement. I know some folks who live really good independent lives by being totally debt free and living off of rental income from a few rental properties.
I know we wandered off a little there but bear with me most folks who are really concerned with transparency happen to also believe that it’s a good idea to be able own a free and clear home for their family one day.
Of course everyone want;s to know what’s going on but I am just writing about my observation that Conservative well qualified mortgage borrowers are the ones most hesitant to sign and agree stating they have “been disclosed” properly if all the figures cannot be explained well and understood.
Mortgage originators (LO’s) may enjoy spending time helping their customers better understand the process and all of the documents that fly by during the home loan approval, processing, and closing.
The regulators’ goals / intentions I believe are to have the average consumer be able to look over a set of disclosures and understand with-out a thorough explanation from a loan office.
It’s true that if you could look over a simple few pages and decide if you have the right lender and more importantly the right lender for your home mortgage loan processing.
As a Florida mortgage broker we aim to help our clients understand the TILA disclosures and all other loan documents you are required by law to receive during the mortgage process.
So if you have not gotten a mortgage loan prior to 2009 you should continue to follow this section of our mortgage website.