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1) Will hurt everyone else [by newmark on December 17, 2007]If you force mortgage companies to take on more costs for the people with loans that can't afford them right now, anyone who wants a loan in the future will get hit with higher closing costs, as the cost of doing business will have increased.
I bought a home in the last 2 or 3 years. What I was "pre-approved" to receive was ridiculous. There's no way I could have afforded such a loan. I went out and did my reasearch on how much, as a percentage of income, you should pay, maximum, as a monthly mortgage payment. I reversed this number to find the maximum dollar value on a home. Then we shopped around and found a home under that amount that we liked.
We don't have a problem paying on our mortgage because we did the research before signing for a loan with 6 digits involved in the number.
What should be required is that people be given a simple paper explaining, with pictures, their payments, loan schedule, amount of money left after payin the mortgage, etc. This should be the first page of any loan. I don't want mommy government stopping me from making a bad move, or penalizing those that allowed me to make a bad move. If anything, I just want all of the information, summarized in a way that makes sense, and presented to me on the first page.
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This is an overreaching bill. Presumably this bill relates to the current mortgage debacle. It would appear the principle objective of the bill is its final provision, to “require a mortgagee to engage in reasonable loss mitigation activities as an alternative to foreclosure upon default of a federally related mortgage loan.”
There is no need to establish an entire consumer protection bureaucracy to meet this need.
This would be a better bill if the entire bureaucracy provisions were deleted, and the requirement above be more cleanly defined and inserted into the Commonwealth’s foreclosure and bankruptcy statutes. Additionally, the redrafted bill could provide for disclosure language in real estate purchase and lending contracts involving purchase loans, advising consumers of available assistance in the market place in the event of disclosure, and notice of the new provisions for the new alternatives available under default.
The bill is further deficient in so far as it offers no budgeting for the creation of the bureaucracy, nor makes budget provision for its financial maintenance.
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Are you kidding? You want to create a bureaucracy to let people know they can’t afford to keep their house without tightening the budget. Let’s save a lot of tax money and just get rid of predatory, sub-prime home loans. Protect people from the front end, rather than let them get into a the financial hole in the first place.
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