copyright Caroline Gerardo
APRIL Fools You thought the Dodd Frank Bill was going to improve the mortgage business, no way.
As of tomorrow new regulations are enacted which have lenders spinning to force employees to sign new employment agreements.
Let me review a few points that will forever harm the consumer further when applying for a home loan.
A. Commission are regulated to not allow any “overage” and pay is capped. Sounds like structurally good ideas but the logic is all foul. Overage was a tool that a private mortgage broker, the individual loan shark used to hedge on several factors. A loan lock is a commodity with a set expiration date. If for some unforeseen reason the loan goes over the date, someone has to pay.
In today’s mountain of paperwork review it is not uncommon= for Underwriters to ask for: a child’s birth certificate, verification of every deposit you made into your accounts in the past three months and standard for lenders to double check everything with the IRS, your employer, and your landlord. If one piece of paper stalls the process, the cost to extend can be huge. If rates
The days of the part time bartender loan guy who can charge you five points hidden in the rate have been gone for two years. Customers can easily walk to the next bank with their pdf files and relock on a better day.
Here is another one of the Dodd Frank Mouse traps: underage. This sneaky tidbit was misunderstood by Senator Dodd. Lenders sometimes price a loan so skinny to beat the competition on minor costs. The savings was passed to a borrower who usually had a clean easy file. This is no longer allowed. Every American is now guaranteed a deal priced the same, even when the bank makes an error –the sales person will not be paid and the chance of your loan closing now declined to .1%
The problem with this theory is each family is not the same. A family with boulders of ghosts in their proverbial closet, cannot be delivered the same piece of cake as a cookie cutter wage earner.
Americans have been holding their fists up at the greedy banks, forgetting that they signed the promissory note and were all too happy to get $ 45000 cash out to buy a boat.
Oh and wait until I tell you about the banks program to charge you for using your DEBIT card, all because of another brilliant Bill by Dodd and Frank.
If you are wondering why your lender is now scrambling to close, call Congressman Barney Frank and complain. His number is (202) 225-5931