Charlotte Home Mortgage News

     Ladies and gentleman, I want to thank those who have decided to read my blog. I'm not sure if everyone is aware of what is going on so I will get right to the point. HR 3915 is a bill that they are trying to pass which will in essence inflict unintended harm to borrowers looking to obtain financing for the american dream.  If they pass this bill it will increase the cost of financing 10 fold to the consumer, it will raise interest rates and if that isn't bad enought it will make lending to first time homebuyers and low income families practically impossible. In addition to the borrowers/consumers mortgage professionals across the country will be facing extinction. It will drive more and more lenders out of business and the economy will come to a standstill! Please write and express your concern. I will provide a sample letter for those of you that would like to fight for the future of home ownership! Below is a summary on the bill.

    On Monday, October 22, 2007, House Financial Services Committee Chairman Barney Frank (D-MA), along with Representatives Miller (D-NC) and Watt (D-NC), introduced H.R. 3915, the "Mortgage Reform and Anti-Predatory Lending Act of 2007."  Below you will find the full H.R. 3915 bill, a section by section summary, the NAMB Press Release, and NAMB’s Testimony presented before the HFSC.

    The bill contains three sections.  Title 1 will create a federal duty of care and outlaw steering.  The anti-steering language will outlaw incentive compensation and YSP that varies with the terms of a loan.  The section will allow indirect compensation if disclosed early in the process.  This section also creates a minimum licensing standard for all originators and net worth or bond requirements of $100,000.  

    Title 2 creates an ability to repay standard and hardwires underwriting guidelines.  Underwriting will include a verified ability to repay and take into account amortizing payments.  Guidelines will also include taxes and insurance payments when calculating ratios.  For refinancing, the act will define and require a net tangible benefit.   For prime loans, there is a safe harbor.  However, for subprime there is assignee liability and expanded rescission rights.  Standards will also create a defense to foreclosure.  Severe restrictions will be placed upon first-time homebuyer mortgages with negative amortization features.  

    Title 3 will expand the existing Section 32 of TILA by reducing the points and fees triggers and expand lender liability.  Prohibitions include no balloon loans, no lending without regard to ability to repay, prohibit a pattern or practice of making such loans, restrict late fees, and prohibit the financing of any points/fees.  Taken together, the expansive liability and prohibited terms and conditions will make Section 32 lending practically impossible.  

 “The indirect compensation mortgage brokers receive from lenders is a defendable fee that actually lowers closing costs to consumers. It is an imperative tool for first time homebuyers, and critical to enable so many people to own a home and manage their finances.” 

   Thanks for reading to all those who have read this. I stongly urge all my clients, friends and family to write Barney Frank (D-MA), along with Representatives Miller (D-NC) and Watt (D-NC), and express your concern on this. If you have any questions please feel fee to contact me at your earliest convenience.