Friday, May 02, 2008

For the sake of comparison, here's a link to a "closing script" for a more complicated mortgage loan.

The loan being described in this "closing script" is an adjustable rate mortgage with a "teaser" rate. That means the consumer is being given an artificially lower rate in the beginning.

Read this script and see if you don't agree with me that these words spoken so directly at closing would help a consumer truly understand the impact of the "teaser" rate. We've read many stories on the papers about consumers who did not understand that their rate would change or were never told because they were working with a predator mortgage lender who was being assisted by a predator closer.

The beauty of the proposed RESPA reform is that specific words, tested as easily understood by consumer, are mandatory. That means that predators can't survive if they are forced to follow these rules. This type of mandatory disclosure will serve the public AND the financial infrastructure that supports mortgage lending by making certain that all parties close with a meeting of the minds. Any consumer who has been mislead, can stop the closing at this point and the mortgage lender is burdened with fixing the problem.

Do you see how the consumer can't be rushed through a signing without full understanding. Even those who refuse to read or can't read will be given these precious few minutes if clarity to verify what they are doing before signing on any piece of paper. Isn't that wonderful?

Here's the link.

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