Clamp Down on Mortgage Lenders?

Alright already. BASTA! That means enough (I’ve loved that word ever since I went to an Italian restaurant once in San Francisco called “Basta Pasta”).

Now that nearly everybody has chimed in on the sub-prime mortgage debacle, spouting off about irreputable lenders who preyed on people too stupid to know any better I think we can all agree it was a combination of many factors but I sure don’t want to see MORE KNEE-JERK REACTIONS BY OUR BELOVED GOVERNMENT like the Sarbanes-Oxley Act of 2002 in reaction to the crooks involved in the Enron debacle and other corporate ripoffs like it. I mean, did it really solve anything? I know it created a ton of paperwork for companies, and keeps a lot of attorneys employed, but that’s all government really ever seems to produce; more paperwork and red-tape.

If we just followed the KISS Doctrine (Keep It Simple, Stupid), we’d go a long way to a much better fix. Mortgages are complicated and wordy (thanks again to our attorney + government friends), so much so that barely anybody reads any of the mountainous paperwork that has become part of the loan process.

I’ve tried it and even with almost 20 year in the real estate business I had to really work to pull out the key information. We got loans on 2 different properties a year or so ago. You know, THOSE TERRIBLE, NOW INFAMOUS INTEREST-ONLY, ADJUSTABLE RATE MORTGAGES, leading down the path of ruin and damnation? But, kidding aside I just wanted to know the basics:

  1. What is my loan amount?
  2. What is my interest rate?
  3. When do I have to pay it off or refinance?
  4. How much do I pay every month?
  5. When will the interest rate adjust?
  6. Is there a pre-payment penalty and if so, how much will it cost me?

You know, just the facts mam. ALL ON 1 PAGE, IN BOLD PRINT. The only other essential I would actually love to see enacted would be to require your mortgage holder to return your phone or email inquiry within 48 hours of receipt. There is probably nothing more frustrating for people than to get in that 800 phone number loop and never get satisfaction.

That would be my fix! Pretty simple: A 1-page straight forward disclosure of your loan terms and the courtesy of access to a live person when you do have a question. Is that too much to ask? I don’t think so. What about you?

Aloha, Mike
RE/MAX Pacific

On Island: 885-5557
Toll Free: 800-500-4895
My “Sell” Phone: 808-896-1943

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