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Mortgage reform is hip and cool in a Congress that wants to be seen by constituents as “agents of change.” And change we are going to get–this will fundamentally reshape how mortgage brokers and lenders do business. I guess the most interesting story line in this is the tentative acceptance being handed out by mortgage industry associations, lobbies, and insiders.
MarketWatch reports this statement from a consumer advocacy group, Center for Responsible Lending:
“On balance we support it, and we think it’s important to have some commonsense rules for mortgage lending,” said Julia Gordon, senior policy counsel at consumer advocacy group Center for Responsible Lending. “There are many protections in the bill that are crucial to strong responsible lending. Now that we have had the biggest mortgage crisis since the Depression, it’s the time for Congress to move.”
You assumption would be that they would jump behind it with both feet, but I think there is understanding that this is a politically popular, but operationally problematic bill.
Organizations like the MBA are also soft-shoeing the impact to mortgage lending, from the same MarketWatch article:
“We are likely to see fundamental changes in how the mortgage market is regulated sometime in the 111th congress,” said Francis Creighton, chief lobbyist for the Mortgage Bankers Association. “This is such an important issue that we would expect Senate action [in committee] pretty soon.”
With a House passage by a vote of 300-114, it looks like this one is stronger than the same bill that failed in 2007. However, the Senate is expected to tack on a few amendments or even whip up a companion bill, which might slow it down or head it to another death.
At the miniumum, if you are a mortgage broker or lender, read H.R. 1728, Mortgage Reform and Anti-Predatory Lending Act and think about your mortgage business strategy in that market.
What Do You Think?
How is this going to impact your mortgage business? What are your opinions of this bill?
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Bill,
Your link to H.R. 1728 is broken.. I will search for it … thanks for the post prodding everyone to wake up and pay attention.
Neto,
Thanks for pointing that out. I have fixed the link.
These things so often shoot through legislatures (especially in environments like these) when politicians feel the need to “fix” things. Then we wake-up one morning and wonder what the heck just happened.
Thanks for the comment!
why do we all just do loans for $100 a piece, that is where it is headed
http://www.myvarefinance.net
While this bill is much more than just a ban or regulation on YSP, the first thing that jumps out to me is the fact that we will no longer be able to offer clients limited closing cost options for refis or purchases. A simple .125% bump in rate could literally save clients thousands of dollars in closing costs, which is what the political powers in support of this bill fail to recognize.
Right on Madsen…and the other natural side effect is that this makes things much tougher on Brokers and does not have the same impact on Bankers…and ultimately will result in fewer choices and options for the consumer. Not a good thing for anyone. Competition keeps us all better within the industry, and leaves more choices and options for the consumer.
(However, the Senate is expected to tack on a few amendments or even whip up a companion bill, which might slow it down or head it to another death.)
do you know if there is an inside senate contact confirming this optimism?
-steve
This bill will put all Mortgage brokers out of Business how can we stay in business if we can't make any yeild spread
Predatory lending legislation, just like this was in effect in all 50 states prior to the debacle that took place. These same people who are advocates of these changes were the ones who took the power away from the states and the protection for those by saying that since they they were federal loans the state's protection laws did not apply.
Now they are acting like the “Lone Ranger and Tonto” to save the day, under the rubric of Federal legislation. Ladies and Gentlemen, we are regulating the wrong industry. We need to regulate the Congress and the Senate. These are the people that have gotten fat by creating havoc!
Definition of insanity: Doing the same thing over and over and expecting different results.