Mortgage Industry Trends

The article in todays WSJ on 'Debating Standards for Lenders' mentions an Ohio law that took effect earlier this year, requiring brokers and loan officers to make 'reasonable efforts' to originate the best loan possible for their client.

Granted, HUGE, GIGANTIC GRAY area on exactly what is 'best' for a client and also 'reasonable efforts' is pretty murky too.

But, the notion that the broker/loan officer should be looking out for the interests of the borrower is dead on with everything that is cited in the press about what is wrong with subprime (predatory) lending.

Enforcement is key. I don't think any broker or loan officer should be in business unless they want to help people- that is supposed to be 'their job'. Mortgage banks lend money- in the wholesale channel, they outsource part of the decisioning process to brokers and loan officers.

ResMae, as I understand, would qualify borrowers looking for arms with the future payment in mind. That didn't stop them from going out of business, going bankrupt and being sold for more than peanuts (thank you Citadel Investment Group, LLC for giving hope to other bankrupt lenders that they won't be sold for less than their actual worth).

Why should a lender or broker determine whether a borrower can make a mortgage payment five years in the future if it might be the stated intention of that home buyer to sell within three years?

Would a potential borrower have to go to court and get a lawyer just to get a loan that fits their suiting and plans?

And recently, I refinanced out of a fixed thirty year into a ten year interest only fixed 30 year? Why? Because now that I have kids, the school system suddenly matters and my house is, sadly, too small to accommodate all the stuff that goes with modern living. A change could very well happen. If you look at what the payment will be in 10 years, I probably wouldn't qualify. But then, by then my wife will be back to work and suddenly, there will be two incomes where their is one. But how could a broker or lender predict that? Based on a sworn statement? And who knows, maybe in ten years, this blog will be making money.