CURRENT LEGISLATION

There has been a lot of legislation of late. Some has past and some has not. I will focus a bit on those that would seem to affect our business and the current issues we are facing.

Mortgage Fraud: The only piece of legislation that seems to have been made into law is that which makes mortgage fraud illegal. The problem is that mortgage fraud was already illegal and there are not enough cops to enforce the current laws we have. There are a lot of people going to jail and there will be a lot more but to simply pass more laws to expand or redefine the definition is not likely to help with the problem. Those criminals who perpetrate mortgage fraud are here to stay just like car thieves and drug dealers.

Predatory Lending: Many well meaning politicians have come to the rescue to try to pass legislation dealing with Predatory Lending. The problem is today as it has been for the last decade is simply you can’t define Predatory Lending to the point that any law would make sense. What is predatory to one group is a business model to another and short of price fixing there will never be any middle ground on this that can be put into an enforceable law. Buyer beware is today and in the future will be the buzz word for anyone entering into the mortgage lending arena. The lawmakers would love to pass laws that would require lenders to all be ethical but it just won’t happen. Most politicians need to understand it themselves in my opinion.

Mortgage Reform: Now this hits on a broad base for sure. Let's take an example dealing with FHA loans. FHA reform was a hot topic and well it should be. FHA was created to help the regular guy get a loan when regular sources were not available and FHA sure needs a new look. The current reform package needs to raise the FHA loan limit, allow for risk based pricing, and redefine what it takes to get an FHA loan. When FHA loans were created people had the ability to get money for down payment and for the most part had good credit or could at least access a system that would help them get it corrected. The politicians have killed anything that might help people buy homes because they just don’t get it, won’t listen, and really don’t care. FHA reform as goes with most smart legislation is gone with the wind.

There is certainly more legislation out there currently and more to come but a focus should be how to get more buyers qualified to buy the glut of homes on the market and those to come. From the looks of things, that just won’t happen.

More to come

Lonny