Monday, May 12, 2008

Visit this blog post about "back-up loans", please.

Here's the post.

Here's a blurb:

Whether it's a different rate, has closing costs thousands of dollars higher, thousands of dollars added to your loan amount that they conveniently "forgot" to tell you about, has a pre-payment penalty when they told you it didn't, is a completely different kind of loan than they told you about in the first place, or even all of the above, the loan isn't what got you to sign up. In some cases, they don't have a loan at all, and are stringing you along in hopes that they will have a loan Real Soon Now.


The author of the post is doing a swell job of explaining in clear, easy to understand, terms just WHY we need the transparent disclosures HUD is proposing.

If we had a uniform GFE tied to the new HUD with the script, these liar loan originators would not be able to operate. Mortgage lenders would out them and fix them or toss them.

Why should consumers be forced to waste the time of loan originators by setting up back-ups?

Why should the secondary market pipeline be filled with the bilge of multiple locks to accommodate the back-up?

It's so simple. Just fix the problem that's broken - the disclosures and the expectations for accuracy. Add to that a bit of teeth to HUD's bite and you've got order.

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