Restoring American Financial Stability Act of 2010
When this new law is fully implemented, it appears that Mortgage Brokers will be limited in what loans they can originate and one wonders if mortgage brokers will even survive this change.
- One of the provisions of the law requires the lender to retain a percentage of ownership, which clearly will not be possible with brokers, but might work with wholesale lenders, where brokers send their loans.
- Another provision sets the compensation to a fixed amount, potentially being so low, it’s not worth doing the job.
- The new disclosure requirements are very cumbersome and most borrowers find them to be confusing.
An overview of this law is as follows: Read the rest of this entry »
Are they blameless in this real estate debacle?
I find it interesting that real estate agents seemed to have dodged any significant regulation as a result of the meltdown in Real Estate. While lenders and appraisers have had massive changes in how they are allowed to do business (see related blog postings), almost no new regulation is aimed at the real estate agent. Read the rest of this entry »
An article in the Sunday paper of the Contra Costa Times, written by Kenneth Harney (Nation’s Housing), writes about a loophole in the new lending regulations, allowing them to not give a good faith estimate upon a new loan application. http://www.contracostatimes.com/search/ci_14193760?IADID=Search-www.contracostatimes.com-www.contracostatimes.com
He suggests that loan brokers are taking advantage of this “mistake” in the new regulations, to not disclose fees. However, it appears that this is another example of the unintended consequence of new laws, once again turning out to be counter-productive. Read the rest of this entry »
I may have helped this become a reality
Of my many complaints about adverse changes in the real estate industry, my number one complaint has been buyers being forced by banks to use No Name Escrow companies. These (bank (REO) chosen) escrow companies were often far away, usually in S. California and they provided terrible service and delayed escrows. So, I was shocked and angered when CAR, our Realtor organization, issued a “red alert” opposing bill AB 957, which gives the buyer the right to choose escrow. I couldn’t believe it. Read the rest of this entry »
As the real estate market began to slow down, homeowners started receiving mailings and other solicitations from unknown companies, making promises to solve their mortgage problems. Much of it seemed too good to be true. (watch out for that!) Read the rest of this entry »
In the last two years, agents have told their buyers “short sales are to be avoided like the plague”. Some of the reasons included:
- The servicing agents were overwhelmed; it took weeks or months for a response.
- The lender was not realistic about values, asking for more than it was worth.
- Second leinholders refused to cooperate.
- Agent commissions were reduced, often at the last minute.
While some of these issues have improved, lenders still are illogical in their response to a short sale offer. One recent short sale of ours failed because the lender could not believe that home values had declined so much, and they would only be getting about 30% of the loan balance in net proceeds. Read the rest of this entry »
