Article Side

Online Article Directory!

Hello Guest! Login or Register to submit articles!

US mortgage reforms on the way

By Apil Gupta Subscribe to RSS | July 16th 2012 | Views:
loading
 
  



The US mortgage industry is set for reforms in the form of shorter forms, if the Consumer Financial Protection Bureau has its way. However, there is a significant amount of history and skepticism behind this move, which is also being seen as a wild goose chase for a trivial pursuit. The reform is an initiative of the bureau which was set up by Democratic US Senate candidate Elizabeth Warren, and takes cue from the Dodd-Frank Act of 2010.

According to the Truth in Lending Act, which was administered by the Federal Reserve, and the Real Estate Settlement Procedures Act, which was overseen by the Department of Housing and Urban Development, required separate forms to get a mortgage estimate and closing. Even after many efforts to combine these procedures, there was no substantial result. Hence, the bureau was entrusted with the responsibility. However, it is noteworthy than in lieu of the upcoming reforms, the Consumer Bankers Association has asked the consumer bureau to apply the proposal to new forms and regulations.

This is being promoted as a more organized approach in an industry that needs to confirm to these changes, all with the intent of making things easier for customers. On February 21 st, the consumer bureau announced via an advisory that it’s mulling over changes to the usage of the Annual Percentage Rate (APR), which is the key metric established in the Truth in Lending Act for calculation of the mortgage cost. The APR includes the interest rate plus other fees related to the mortgage and are basically created to give a single metric to the consumer to know the cost of the loan. But the Truth in Lending law also excludes some pretty hefty fees from the APR calculation, like charges for title searches and insurance.

It is expected that the consumer bureau may incorporate other fees into the APR calculation (including title costs). However, if title insurance is indeed a part of the calculation, then lenders have the option of negotiating volume discounts and reducing the price that can be charged by title insurers. As of now, owing to the rules, the title insurers can have a cartel, of sorts. The upcoming reform may end up confusing borrowers. There is also the concern that an all-in APR would be detrimental for consumer sentiment with regards to shopping for title insurance and may also mislead customers regarding costs in states where the seller is always expected to pay the title fees; where the charges are split between and buyer and the seller; and where the buyer pays the charges. Also, an all-in APR would significantly reduce the availability of credit by forcing low income borrowers into high cost loans, resulting in increased cost of credit.

The draft mortgage forms of the bureau have also been criticized by consumer advocates. These forms are used as a graphic to de-emphasize the APR calculation in favor of the interest rate, which creates an opportunity for lenders to increase their fees and raise the total cost of the loan. You can contact me for Adjustable rate mortgage, Home mortgages, Mortgage loan, 30 year mortgage rates, 15 year mortgage rates.

Apil Gupta - About Author:
You can contact me for Adjustable rate mortgage, Home mortgages, Mortgage loan, 30 year mortgage rates, 15 year mortgage rates.

Share on Facebook Tweet It Stumbleupon this post This post is delicious !

Article Source:
http://www.articleside.com/mortgage-articles/us-mortgage-reforms-on-the-way.htm

Related Mortgage Articles Subscribe to RSS

Good mortgage rates are important for a comfortable mortgage period
Published by Jack Smith on June 22nd 2012 | Mortgage
Get mortgage rates that you can easily pay off even in the future because a mortgage affair can last...
 
How to procure loans at Best adjustable mortgage rates?
Published by Jack Smith on June 24th 2012 | Mortgage
The above points can easily help a borrower to seek loans at best rates while saving his money and m...
 
Second mortgage might require the help of a strong broker
Published by Thomasgalvin on January 3rd 2012 | Mortgage
Availing a loan for a specific purpose is one of he most arduous task in the whole wide world, what ...
 
You can still borrow money with bad credit mortgage
Published by Jack Smith on June 24th 2012 | Mortgage
Bad credit mortgage is really helpful for those who have bad history in past, and with the help of t...
 
Adjustable mortgage rates opening paths for money saving
Published by Jack Smith on July 25th 2012 | Mortgage
In the field of finances, where Adjustable mortgage rates are becoming the most picked choice for al...
 
Bad credit and mortgage refinance option
Published by Kam Brar on December 16th 2011 | Finance
As people think, it is not easy to get mortgage refinance with bad credit. There are various factors...
 
Get out of a bad credit mortgage situation
Published by Jack Smith on June 20th 2012 | Mortgage
If you need a bad credit mortgage, there is no doubt that you are in a tight fix. But bail yourself ...
 
Consultants to guide you for bad credit mortgage rates
Published by Jack Smith on July 26th 2012 | Mortgage
In the process of hunting for bad credit mortgage rates there has been seen an immense rise. But, to...
 
Looking for refinance mortgage loan - How to find the right one
Published by Apil Gupta on June 24th 2012 | Mortgage
In case you are looking to refinance mortgage loan for your home, there are many things that need co...
 
Find the perfect california mortgage broker online
Published by Apil Gupta on June 24th 2012 | Mortgage
The importance of finding a good California mortgage broker online is paramount in today's times, pa...
 
Most excellent home mortgage calculator plus home buying tips
Published by Andrew Watson on December 30th 2011 | Finance
For a number of people it certainly is very much common to look around for best mortgage calculator....
 
Exploring best adjustable mortgage rates as per expectations
Published by Jack Smith on July 23rd 2012 | Mortgage
The act and need for searching best adjustable mortgage rates is common in the world, where people s...
 
The real truth about mortgage rates
Published by Jack Smith on April 16th 2012 | Mortgage
While mortgage rates may differ with several companies and diverse plans¸ a good, hard-working barg...
 
Consult well about Adjustable mortgage rates before selecting
Published by Jack Smith on July 23rd 2012 | Mortgage
Adjustable mortgage rates are turning worldwide popular because they offer variations on the rate of...
 
US mortgage rates hit record low at 3.66%
Published by Apil Gupta on July 16th 2012 | Mortgage
There was a significant drop in the US mortgage rates for 30 year fixed loans...
 
Why is an adjustable rate mortgage so popular?
Published by Apil Gupta on June 24th 2012 | Mortgage
An Adjustable Rate Mortgage (mortgage ARM, for short), also known as the lender's Standard Variable ...
 
Low interest rate brings cheaper mortgage deals
Published by Sandra Jeux on January 25th 2012 | Mortgage
Interest rates are at the lowest side for mortgages at current time which is leading people of the c...
 
Your guide to finding the best mortgage rates
Published by Jack Smith on April 13th 2012 | Mortgage
The best mortgage rate may have to be decided upon after exploring several options but will be certa...
 
Be informed about Colorado mortgage or Denver mortgage and make a wise decision
Published by Serena Woods on February 15th 2012 | Mortgage
Being informed is never bad especially when you need to make an important financial decision....
 
US mortgage reforms on the way
Published by Apil Gupta on July 16th 2012 | Mortgage
The US mortgage industry is set for reforms in the form of shorter forms, if the Consumer Financial ...