October 25th, 2011 6:33 AM by Diego Quintero
Article first published as, "New Laws to Protect Consumers, Future Home Values," on Technorati.
From 2005 until about 2008, the mortgage industry was becoming a place where creativity was taking precedence over ethics. Large banks expected the large and mid-sized broker to maintain quotas for lending. The volume of funded loans became more of a focus than the quality of loans issued. In the "Report to Congress on the Root Causes of the Foreclosure Crisis
When you stir these two components in a large pot, let’s say the size of the our great country, it produces a world-wide shock to investments and, well, you know the rest! We are living it!
The topic has been discussed a million times over. However, as opposed to assigning blame, lately the conversation is more about the changes taking place. Our politicians on the hill, Barney Frank and Chris Dodd have written the self entitled, Dodd-Frank Act
To provide ethical loan origination services, a licensee must:
While it may be tempting to simply agree with a borrower who wants to refinance in order to earn origination fees, a licensee must only promote the refinance when he/she is sure the borrower:
Borrowers are not the only ones to benefit from the proper matching of applicant to loan product. Lenders and mortgage-backed securities investors also benefit. Loans granted to borrowers who have the ability to repay are less likely to end up in default and thus do not contribute to the creation of undue volatility in the mortgage markets.
While these changes in ethics, procedure, and consumer enlightenment serve to protect our home equity and improve our economic growth, you will need to be prepared to submit much more personal information than in the past. For those who have begun a loan process in the last three years, you were already aware of that!
Take the time to
Your trusted mortgage professional,
Diego L. Quintero