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Opinion: Should Dodd-Frank be amended?

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Mortgage Professional America | 09 Feb 2017, 08:15 AM Agree 0
There’s no doubt that some regulation is necessary in any industry. But over-regulation can hurt the consumer just as much as under-regulation
  • Drain the swamp! | | 09 Feb 2017, 11:52 AM Agree 0
    DF absolutely has to be amended! I have over 25 years in this business and it is a total log jam today: consumers are frustrated.
    First thing: get rid of the Amc's. Every appraiser is licensed and capable of scheduling their work week. Amc's bring nothing to the table except for high priced appraisals and red tape. People need to understand that you only get one shot at an fha appraisal, and if an incompetent one gets the order, that seller is in trouble, for I believe 6 months. The appraisal goes with the property, the buyer can pick up and walk away.
    The next thing to get rid of: the 72 business hour rule from CD to closing. When you add in weekends and holidays it can be nearly 100 hours... people don't read documents on less chaotic days like weekends and some holidays?? What's reasonable? Not 72 business hours.
    Lastly, get rid of all the redundancies, we are AMERICA!!
    Let's keep all the safe harbor stuff to keep the bad people out of our business, which other industries in our country should adopt asap... like realtors.
  • Bigly mortgage company | | 09 Feb 2017, 11:58 AM Agree 0
    The irony of Gary Cohen from Goldman Sachs standing over Trump with an order to dismantle Dodd Frank is something to behold, the same Gary Cohen who was at the helm of Goldman during the last housing crash that almost brought the world economy to its knees. The wolf is now guarding the hen house.

    The standard of Mortgage mortgages right now is very good. Don't try to tell me that FHA or VA needs to lighten up, 580 ficos to 96.5% LTV with average credit and little to no money left in the bank after closing, is already scraping the bottom of the barrel.
  • Realist | | 09 Feb 2017, 11:59 AM Agree 0
    Drain swamp comment below is spot on!! Realtors often are a huge part of the problem! But I won't go there now. Dodd Frank has done nothing but increase cost, time to close and cause everything to be a mess
  • Mortgage Broker | | 09 Feb 2017, 12:36 PM Agree 0
    I agree with Drain Swamp completely. Furthermore, we need to level the playing field among mortgage brokers, which is me, and big banks and credit unions. For instance, when computing QM, a mortgage brokers comp gets added to the 3% total fee rule. This is not the case with banks, credit unions and mortgage bankers. I can get the consumer the same rate or lower than the local credit union and bigger banks (not even mentioning superior service) but have a harder time passing QM, especially if we go past the rate lock and need to pay for an extension, which is typical in this environment with the complexity of lending. Second, we need to revise HPML which is a somewhat ridiculous guideline. Some mortgage transactions such as short sales or rehab mortgages, can take 5 months to close. The APR benchmark is set in the beginning of mortgage by using the APOR as the benchmark, if rates go up, like they did dramatically after the election, many borrowers were failing HPML tests by the time they were able to lock in. FHA 203k mortgages suffer the worst from this because the APR is the highest with these mortgages due to the higher rate and MIP. We need to lighten up a bit.
  • Lowly Broker | | 10 Feb 2017, 12:34 PM Agree 1
    1. Drop the CD wait period on refinances as there is a long standing 3 day rescission already in place or drop the rescission period.
    2. Reduce the CD wait period to 24 hours.
    3. Allow us lowly brokers to use yield spread again as necessary to cover the borrowers costs.
    4. Allow us lowly brokers to use our compensation as we feel it necessary.
    5. Remove the compensation cap period. No other industry has caps!
    6. Remove any compensation disclosure for us lowly brokers. Everyone knows there is no such thing as a free lunch. Seasoned players (27 years) knows how to structure a deal compensation commensurate with the work involved to make the deal.
  • Lowly Broker | | 10 Feb 2017, 12:40 PM Agree 1
    7. Get rid of the AMC as they only add cost to the process
    8. Allow us lowly brokers to order the appraisal without any waiting period as before with whomever we choose. They are all licensed now.
  • Being Honest | | 10 Feb 2017, 01:00 PM Agree 0
    "For example, under Dodd-Frank, if a mortgage officer, mortgage broker, or branch manager wanted to waive all or part of his commission to lower the APR for a consumer, he is not allowed.  He must be paid his pay even if he does not want it, and even if it increases cost for the consumer.  That is just one example of an unintended consequence of a bill that was meant to protect the consumer." THAT IS EXACTLY THE INTENDED CONSEQUENCE. A mortgage officer, mortgage broker, or branch manager has the option of waiving all or part of his commission to lower the APR for all his clients. He just doesn't have the ability to lower it for a few select mortgage mortgage savvy negotiators and charge all of his other clients higher rates and fees. Prior to Dodd-Frank, there were clear examples of novice home-buyers being gouged by unscrupulous mortgage originators. It appears that the with the new administration, the ponies are starting to rear-up at the Dodd-Frank fence with the hopes of breaking out.
  • Keeping it real | | 11 Feb 2017, 07:50 AM Agree 0
    I have read all of the prior comments. I have been 16yrs in the mortgage industry. I would have to say I disagree. I feel CFPB eliminated alot of shady brokers and lenders out of our businessite and kept them out.
    I do feel there should be some changes in the act, such as the AMC companies. It was a good idea, but when the AMC charges almost $100 to review the order and report, it is getting ridiculous. The compensation does need to be changed a bit as well. Example, originators put just as much work on 50k mortgage as a 180k mortgage but on a 50k mortgage is compensated very very low. The comp structure, this hurts the consumer in my opinion.
  • Rod | | 21 Feb 2017, 07:26 PM Agree 0
    I agree with the article. There are several components of reform i like but we don't need an army of regulators making a living on fines. Entry training/barriers/ and compliance cost have certainly aged our industry in Alabama. (Average Age 57 for mortgage professionals). Regs priced us right out of the lower value properties. Now returning B/C (cough) paper doesn't make sense to many business owners at the same pay scale forced on the industry by Dodd Frank/CFPB. They outlaw tiered pricing then instituted risked based "Tiered" pricing to benefit them while capping pay for originators...something we've really never seen in my life.

    I just have to believe Trump will keep small business America in his heart as he proceeds. I've owned my mortgage firm for 30 years next month and can't be real "frank" in this setting...I hope state law and enforcement is a big part of the solution vs some big regulator army we've seen forming around CFBP. Had there been congressional oversight I may have swallowed that pill easier.

    I don't know any good mortgage professionals that doesn't believe in protecting their customer. That's their future.

    Let's hope we are at the table these next weeks as this unfolds.

    R. Morris
    CEO First Equity Home Loan, Inc.
    Pres Elect & Legislative Chair- Alabama Mortgage Professionals Association
    State Delegate NAMB
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