Mortgage Talking Points

I really don’t like to bad-mouth anyone, but I also have a problem with misinformation that is coming from the mouth of “experts” in the industry.

I’m talking about a seminar that is sponsored by NAMB and is going throughout the country with mis-information that is scaring everyone a little bit. The seminar is a “High Performance Strategies Seminar” and is given by a couple of well known and highly respected industry speakers.

I recently attended one, and personally, I don’t like that the seminar was nothing but a big advertisement for product. There was no real content provided… especially the first half. But putting my personal feelings aside, the first speaker referred several times to the new TIL Disclosure changes effective 10-1-08 - specifically concerning ARM loans. And he talked about how his product would provide the updated version to keep everyone in compliance.

The TRUTH is that the TIL disclosure changes are effective (quoting the actual law) “30 months after the date of enactment of this Act.” Enactment was 7-30-08 and I have a hard time adding that up to be effective 10-1-08. Let’s see… 30 months… that’s about 1-30-2011 if I am adding correctly, and I’m usually pretty good at math.

And about the format of the ARM disclosures [Sec. 2502 of the Housing and Recovery Act] “Prior to issuing any rules pursuant to this clause, the Board shall conduct consumer testing to determine the appropriate format for providing the disclosure required under this subparagraph to consumers so that such disclosures can be easily understood… “

In other words, how can the changes be implemented when the format is still up for grabs?

In all fairness, there are some TIL disclosure changes that are effective 7-30-09. (That’s a year.) I’ve decided to include the details of the required disclosure changes in the next issue of MortgageCurrentcy.com just because people are hearing about it and need to know what’s really going on.

Bottom line, be careful what you believe, especially when someone is trying to sell you something. I adore the second speaker, and honestly don’t like to be gossipy, but I want you to have the real info.

None of the TIL disclosure from HR3221 are effective until a year from now. Honest.

Knights ALWAYS Follow the Code

It floors me that nobody I talk to knows anything about a silly little matter called the “Home Valuation Code of Ethics“. It has such huge consequences! If you want to know about it, read “Will Brokers Lose the Ability to Order Appraisals” at MortgageCurrentcy.com. The bottom line is that unless something changes, no one in the entire production staff can order their own appraisals as of 1-1-09.

Someone e-mailed and asked me who was left to order them… the Seller? I thought it was pretty funny. (Except not.) The answer is ordering through a third party, usually an Appraisal Management Company. In fact, some lenders already require you to do this. It’s the “Code”.

Ya know, I really do have mixed feelings about it. Everyone knows that you order the appraisal from the appraiser who will give you what you need. Right? Don’t you think there’s a conflict of interest when the person picking the appraiser has a commission riding on the transaction? I do.

I also realize that it will wil be a crisis to all of those honest and ethical loan officers who have a favorite (honest and ethical) appraiser because the appraiser is responsive to rushes, letters, whatever. 

Hate to say this, but I still think there’s a conflict of interest.  My struggle is that I think “Code” takes it too far. 

BUT IT DOESN’T MATTER WHO THINKS WHAT.

As of right now, The “Code” is still on for 1-1-09. And if you think about the political environment and the current view of mortgage brokers, it may just happen after all.

And you know what? We’d adapt. (It’s the appraisers I’m worried about.)

I’ll let you know what happens.