Senate Housing Bill Has Its Critics, Especially Among Mortgage Lenders
Right now, a housing bill is finding its way around the Senate floor. This housing bill has a lot of “stuff” crammed into it. Stuff that the bill’s sponsors say will help the housing market (and by extension, the economy) recover, and that it will prevent something of this magnitude from afflicting us again.
Mortgage lenders are among the six trade groupsNei certi siti potete informarvi come installare i giochi, gestire i problemi di connessione, e seguire i direzioni del software che vi guidera’ al casino online virtuale. that are opposing some of the aspects of the Senate housing bill, insisting that it imposes unfair requirements on them, and that it will also reduce the number of mortgage loan products offered to customers. Here are some of the things that mortgage lenders, trade organizations and businesses object to:
- Requiring that mortgage lenders determine which loans are best for borrowers.
- Requiring that mortgage lenders better verify whether or not borrowers can actually afford the loan.
- Instituting a national mortgage lender licensing requirement overseen by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators.
On the one hand, these groups have a point: Is it really the mortgage lenders’ responsibility to ensure that borrowers can afford their loans? Should they really be responsible for making sure that consumers get the best deal. Shouldn’t that be the borrowers’ job?
I’d agree if I hadn’t just been through a mortgage loan process that involved mortgage lenders trying to convince me to buy more house than I was comfortable affording. “I can get you approved for this amount! Let me show you some of the great programs that will make it possible for you to pay for a home that costs this much!”
Mortgage lenders make it sound like you really can afford the loan. Then most of them don’t care whether you can, because they just sell your loan to someone else, pocket the commission and move on without having to worry about whether or not you foreclose in five to seven years. Most people just don’t know where to go to get the information that can help them avoid such pitfalls. Financial literacy isn’t taught in school — despite its increasing importance in today’s world.
While I don’t think that mortgage lenders should accept full responsibility for the home loans, they should accept some of it. And requiring that they not offer an ARM to someone they know won’t be able to make the payments when it resets is one of those things.
It’s not the end of the world if consumers don’t have access to ARMs.
Tags: home loans, mortgage loan blog, home mortgage loan, mortgage lenders,
foreclosures, ARMs, Senate housing bill
June 20th, 2008 at 9:54 am
[…] as many Republicans lined up in support of a Senate housing bill, and even as many mortgage lenders withdrew some of their objections to the housing relief bill, […]