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House passes QM refinement

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Mortgage Professional America | 11 Jun 2014, 07:16 AM Agree 0
The House of Representatives has unanimously passed a bill that would refine the provision in the “qualified mortgage” rules that limits points and fees to 3%
  • Griff | | 11 Jun 2014, 10:32 AM Agree 0
    Leave it to the House to pass a bill for the big guys. Affiliated arrangements is the ONE thing that SHOULD be in the 3% cap. Amazing to me that we cannot get relief from the AMC's running appraisals, or 3% cap in general, but we can get relief on affiliated arrangements. Why shouldn't these arrangements be subject to the 3% rule,,, because they may cause issues with the one stop shopping that is not good for the consumer anyway.
  • Gordon Schlicke | | 11 Jun 2014, 10:38 AM Agree 0
    Relief can be had by accumulating enough money to buy the votes in Congress. Until an entire generation decides we've had enough it will remain that way.
  • Michael | | 11 Jun 2014, 10:46 AM Agree 0
    The 3% Rule is totally unfair and designed only for the purpose of protecting the consumer from his or her own stupid mistakes. What is coming next? Will the government begin controlling the auto industry and limiting them to only a 3% gross profit margin? How about the food industry? Maybe the clothing industry? Why not every business? Do we punish the Mom & Pop small business because they cannot price match Wal-Mart? Will Nordstrom's be punished for not pricing the same as Ross or the Dollar Store? Do you see where this is going?

    The better system is to educate the consumer. If the consumer is willing to pay whatever fees charged that is his or her prerogative. If the consumer is to lazy to do his or her research and ends up paying a higher price for a product or service ... shame on the consumer, not the business or industry.

    Well maybe educating the consumer is an impossibility ... our public schools have failed in this arena miserably for decades now haven't they.
  • BM | | 11 Jun 2014, 11:00 AM Agree 0
    I'm constantly amazed by how easy Lobbying Congress (a form of bribery) is when you have big bucks. So the builders and realtors can have title and lender affiliates that don't count against their 3%. Really? And the CFPB really thinks the affiliates don't charge higher rates for both than do the local small broker shops

    It's bad enough that the housing market is suffering because of the economy but our revenues have been reduced to a maximum of 2.75% so the banks can feel save and have a cushion. Our average year to date through May is less. A comparison for the same dollar volume basis points versus last year is a 31 basis point loss equating to over $48,000 or $9600 monthly...........and for what? Nothing has been done to protect the consumer, only the banks.

    Thanks CFPB and thanks Congress
  • Sad Day for Mortgage Associations | | 11 Jun 2014, 11:22 AM Agree 0
    It's truly sad that CAR and NAR are more active to protect the little mortgage guys where as the money we pay to our dear NAMB and CAMP is being used who knows how!?!?!?
  • David | | 11 Jun 2014, 11:48 AM Agree 0
    The reason for this 3% QM cap in the Mortgage industry is simply that the government thinks the consumer is too stupid to comparison shop for a mortgage. It's as simple as that.
  • Roy | | 11 Jun 2014, 12:30 PM Agree 0
    next year they will limit Mcdonalds competitors to $1.00 per hamburger price and Mcdonald's can charge $2. The whole thing stinks
  • JeffP | | 11 Jun 2014, 02:30 PM Agree 0
    We're not talking a 3% profit margin here.....we're talking about 3% on a 100k mortgage. That's a big difference! Consumer education is key but like in many industries, if there are unscrupulous mortgage brokers out there (and there still are) something needs to protect the consumer from double talk and limited disclosure until it's too late in the transaction (purchase) and the consumer needs to go forward with the deal regardless. I just "saved" someone from a "competitive matching fixed rate" with 5% down and "no points" and no PMI...........that was going to pay over $11,000 in total closing costs (not including taxes, escrows, and prepaid interest) on a $100k mortgage to buy a condo. It seems that a broker for a company sounding like "Quick Loans"...........neglected to disclose a mortgage discount fee of 4.25% plus almost $1049 in "our origination charges".............while all along quoting "about $3500 in closing costs( oops forgot the 3rd party charges)! It's creeps like that in our industry who have created the need for all this regulation........we should have done a better job policing ourselves!
  • Patty | | 11 Jun 2014, 10:16 PM Agree 0
    CFPB and congress have already made getting a mortgage too hard, this will complicate it further because we have to pay other providers to do their job and get the mortgage to closing! Consumers will end up paying more in Rates to get credits so the costs can be covered because they will need to be paid! And I agree regulate the conflicts like affiliate relationships and in house lenders! Some changes were necessary but we have gone completely overboard! Enough is enough! Where are the lobbyists?
  • @loanguysteve | | 12 Jun 2014, 11:12 AM Agree 0
    Look at the under current people. This is going to make the Broker industry in lending disappear. If the big boys get their way then what do you think is happening to the little guy. The MBA and the NAR are lobbied by the big boys to NOT allow market share to be diminished. Look out below because more people will be losing jobs in the broker industry and the big boys are driving the industry to automation. We will cease to be a people or relationship business in 10 years or less.
  • Lee in CA | | 18 Jun 2014, 01:29 PM Agree 0
    Michael, that is an extremely cynical view. "Borrower beware" is a dangerous environment for consumers that have no real means to be fully educated on the nuances of mortgage costs and pricing. Comparing that to auto or retail shops is an apples and oranges situation. Mortgages represent a complex transaction involving 5 or more separate and typically independent entities with fees for each. Unless a borrower has done multiple mortgages within the last handful of years then it is unlikely that they could ever get truly acquainted with the ins and outs of the mortgage transaction.

    Additionally, with retail and auto, you are talking about transactions that are significantly less in dollar amount than a mortgage. A retail shop making 20% on an item may at most garner $40 on a $200 sale while an automobile dealer that makes 10% would make less than $2500 on a $25,000 deal. The 3% cap restricts the originator to a total of $9000 on a $300K mortgage or $30,000 on a $1M mortgage. Definitely not the same thing.

    What I would love to see is a better basement set on this type of regulation... i.e. $6000 or 3% whichever is higher... because my concern is that the mortgages below $200,000 will have a harder time finding a home.
  • Mortgage educator/servicer/underwriter | | 25 Jun 2014, 02:03 PM Agree 0
    Well said, The Greed out there is what has cost not just the industry but the nation to suffer the consequences. And unfortunately there are ignorant consumers out there. In some cases all the education in the world won't help. Two ways to learn getting an education or getting an experience, both can be costly. I would rather help educate someone buying a house than see them go through a foreclosure and have their family out on the street because they ran into greedy individuals who didn't give two cents for the consumer. I have had 30 years experience in the industry from servicing mortgages to making mortgages to underwriting the mortgages. I have seen the excited homebuuyer and I have counseled families to avoid foreclosure. I have also had to cry foreclosure sales. If originators had to service their own mortgages. Better mortgages would be made.
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