RealEstateRaves

The efforts by Barney Frank (D-MA) chairman of the federal Financial Services Committee should be applauded for this efforts to clean up the mortgage industry…..BUT the consequences could be devestating and once more an example of our well meaning government to over reach and actually create more serious problems.  It is important for every citizen to carefully review this legislation and write your representative immediately if you feel as I do that this legislation may very well cause more pain than remedy.   

As near as I can tell here are some of the serious consequences that will unfold should this legislation pass the house next week….that’s right next week, week of November 12th!   CONSEQUENCES: 

1.  Mortgage brokers will be required to post enormously costly bonds…so much so that most say they will shut their doors.   Mortgage brokers are in part responsible for maintaining a competitive market place holding large banks in check allowing us to shop for and find competitive mortgage rates.   The oil industry is a good example of what can happen when  a few large players control.  The “seven sisters” as the big boys are known are making pretty good money these days thanks to our willingness to pay $3 + per gallon.  Actually it’s not our willingness….we have no choice.  Let’s not let this happen in the mortgage world.

2.  Standardized underwriting would not allow for special circumstance s among borrowers.  My circumstances are different than everyone else and I want my loan broker or bank to take that into consideration when lending.  One loan doesn’t fit all.  There are exceptions every rule…right?

3.  Mortgage interest rates will go up immediately.  That being the case wouldn’t higher interest rates make our current mortgage crisis even worse making it even more difficult for people victimized by the industry’s loose rules and loan practices in the first place. 

4.  Borrowers will no longer be able to finance closing costs.  In other words, you would not be able to include those costs with your new loan as we all now do.  Instead, after HR3915 passes you would now have to pay these [closing] costs out of your own pocket with cold hard cash.  Depending on your loan that out of pocket expense could be considerable and probably keep you from refinancing, buying, or successfully selling your home to a potential buyer.

5.  Read HR3915….Google.com it now, consider the impact of this legislation on you, your family, your friends and people you care about and if you agree with me write your representatives immediatley and urge or beg them to consider these factors and amend the legislation at once.

Joe Parsons

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