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As part of its ongoing Mortgage Reform program in November of 2008 HUD published 24 CFR Parts 203 and 3500 Rule to Simplify and Improve the Process of Obtaining Mortgages and Reduce Consumer Settlement Costs.

In short this was the result of a process which started in 2002 aimed at simplifying and clarifying the Good Faith Estimate (GFE) to enable the average borrower to easily understand a mortgage offer from any particular lender and to compare it with an offer from another.  A secondary goal was to harmonize the GFE with the HUD 1 final settlement statement enabling the average borrower to be able to easily comprehend any changes between the GFE and the HUD1.

The GFE is as you would think an estimate of the costs that a borrower will incur in doing a particular loan. Because it is an estimate there can be changes to the final loan costs which are reflected on the HUD1.  Some of these are justified due to changes that will occur in the mortgage process. However many times the GFE was issued artificially low in order to lure a borrower into doing a loan then the fees and charges would be added later and then reflected on the HUD1 with a surprise at closing.

After reading the lengthy document what became clear to me was that the consumer was never in the forefront of the process. According to HUD and I quote “The changes made by this final rule are designed to protect consumers from unnecessarily high settlement costs by taking steps to: improve and standardize the GFE form to make it easier to use for shopping among settlement service providers:”

Whatever the original intent at HUD for this process was, by the time the various industry groups (Bankers, Brokers, Realtors, Closing Agents’ Appraisers etc…),  plus the lobbyists, and politicians had put in their 2 cents worth, what has emerged is a regulation that is anything but simple and straight forward for the consumer.  As you read the document and the various statements by the different industry groups it is quite interesting that it reads more like a turf war than anything else. For example the Bankers support the bill as long as the Mortgage Brokers have to disclose the yield spread premium, the Brokers agree except they want to be able not to show the YSP just like the bankers. After the 6 year period of being pulled, poked, prodded by all concerned what has emerged is at best a weak compromise that accomplished only marginal improvements.

It seems to me that the simplest way to do this is to give the consumer a good faith estimate outlining all charges in a logical comprehensive way with no differentiation for the lending source and make this form standard in same format in the preliminary GFE as it is in the final HUD 1 settlement statement. List in detail all the charges that are involved in the loan and who they are paid to. Unfortunately the only group that would benefit from this is the consumer. So we have ended up with a compromise document that will like the Truth in Lending (TIL) form will probably do as much confusing as clarifying.

If we can learn anything from past experience it is that once various special interest groups get involved the interest of the people gets sidetracked or at least diminished. The complexity and variability of the Mortgage Process has made it much easier for those who wish to perpetuate mortgage Fraud. Half baked attempts at reform will not result in change. The real answer for the average borrower is to understand the process. This is and will be the ongoing goal at marshonmortgages.com

It is no secret that our economy is presently in a state of disrepair.  And, while, many people are looking for ways to generate more income, mortgage refinancing could free up a significant amount of money each month without requiring you to do any additional work.

The fact of the matter is that the present job market is pretty tight and there seems to be a shortage of opportunities when it comes to finding second jobs or career advancements.  This being the case, it is a good idea to evaluate your finances and determine what can be done to create more opportunities with the income you are presently bringing in.

Or better yet, it is a good idea to look at your finances and determine how you can spend your money wiser.  Mortgage refinancing could be just the thing.

Interest rates in the housing market are amazingly low right now.  While there has been some talk about the interest rates beginning to climb back up, they are still lower than they have been in decades.

If you purchased your home mortgage over a year ago, there is a great likelihood that refinancing your home can save you a substantial amount of money on your mortgage payments.  Because it is true that interest rates are slowly beginning to rise, it would be wise to act quickly.  Even lowering your interest rate by one percent could save you hundreds of dollars each and every month.

Keep in mind that not every lender or mortgage broker offers the same interest rates.  Just like any other consumable product, the market for mortgages is competitive.  As such, it pays to shop around before refinancing your mortgage.  By shopping wisely and finding the best avenue for mortgage refinancing you can alleviate much of the financial pressure that comes with making mortgage payments.

If you are in the market for a new home, or even just in the market to refinance the home you presently live in, you would be wise to understand that there is more than one type of home mortgage out there.

Understanding the variation in home mortgages will help you find the loan that is best for your particular financial circumstances. This article will go through the most common types of home mortgage loans so that you can know what is available and what is most fitting to your needs.

• The fixed rate home mortgage loan is one of the more common types of loans. The primary feature of this loan is that the interest remains constant throughout the life of the loan. Regardless of fluctuation in national interest rates, you will pay the same amount of interest on this loan.

• ARM loans have a window within which the interest remains fixed. During this period, the interest rate is offered at a lower rate than a fixed rate loan. However, once this window expires, the interest on the loan is permitted to rise to meet national interest rates. Therefore, if you remain in the home for a long period of time there is a chance that your interest payments will grow substantially.

• Balloon loans allow you to make relatively small payments during the early years of the loan, but require that you pay off the entirety of the loan in one balloon payment after a period of years — generally about five or ten years, to be precise.

• The government also offers loan programs, such as FHA loans to help qualified home buyers get into homes.

Knowing your home mortgage loans can help you ensure that you get the loan that best suits your needs. Making home mortgage payments will become a big part of your life once you purchase a home and you want to make sure the payments are manageable.