Idaho Participates in Multi-state Licensing Bill

A bill designed to enable Idaho to readily convert to the national automated licensing system has made its way through the house recently. The state law, which will amend the Idaho Residential Mortgage Practices Act, will authorize the Director of the Idaho Department of Finance to participate in the implementation of a multi-state automated licensing system for mortgage brokers, lenders, and loan originators. Not all states currently require licensing, but many industry regulators are pushing hard for laws in all 50 states. The multi-state program is being coordinated by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators.

LoanMagic is not New News, But Good News

Posted Jun 14th 2006 7:14AM by Christi LundquistFiled under: Mortgage technology
Okay, so LoanMagic is not news to some, but to others (like me) who are new to the wonderful tools of LoanMagic - there could be some real benefits. LoanMagic was launched in 2003, but has hit my desktop today - and like a ton of bricks! There is just so much that I have wanted to do for so long, and even though I am going to enjoy my free trial, I don't think I'd want to let go of it for quite some time.

There are a few things that really grabbed me, one of which was the ability to track the activity of loans, allowing you to notify your clients of any changes in the market that may affect their loan. Aside from that, it's user friendly - even with the multitude of tools available with the program. I don't make a penny by sharing this information with you, I just truly feel like I'm spreading peanut butter on bread with a knife instead of a spoon now! It used to take me hours to compile some of the reports that I can pull up in just minutes, and I am amazed - so I had to share! Finally the word "instant" really means something to me. You can download a free trial or see a demo from their website. One of the loan officers that raved to me about it last week says it really helps her close more loans per month just due to the types of reports she pulls, impressing her clients with how easy it was to understand what she was telling them. That's what I want to hear - and I sure look forward to testing that theory myself!

Homeowners "Needed" Creative Lending

In recent years, it borrowers were finding it more and more difficult to find a home loan that they could afford. But now it is catching up with all of us. Renters were crying out for solutions to high interest rates, bad credit loans, and in general - a way to jump on homeowner's bandwagon. It led the way for the interest only loans, the exotic loan, or as someone once put it - the "toxic loan". The question is, can lenders be creative enough to save millions of homeowners from sure financial disaster? The 40 and 50-year loans aren't gaining momentum the way it was once thought, and refinancing might become an impossibility since lenders are correctly hesitant to hand out 130% loans. Many people were unwittingly victim to the "scare tactics" used to create an urgency to buy before prices skyrocketed beyond affordability. Others bought their homes convinced that they would double their profits over the next few years. Creative lending may not be able to pull troubled homeowners out of the pending crisis at hand - and yet lenders don't seem overly concerned.

In my last post, I reflected on a comment made by a hopeful in the industry, who believes that the troubles that overburdened borrowers could experience may be an "opportunity" for lenders to cash in on the need to refinance. However, what he did not mention was the probability that many homeowners are using their equity as a cash giving ATM machine, and actually facilitating financial doom. A huge portion of buyers who were approved for either interest only or exotic loans would not have qualified under traditional standards. I have probably hit a nerve with some homeowners who feel entitled to own a home even though they can't afford one, but I speak from experience. I am a renter not only due to circumstance, but choice. I could have easily for a creative loan, but under the advice of my father, an attorney, I read the fine print. By doing so, I realized what my payments had the potential to become, and "disqualified" myself as a buyer at that time. I couldn't be happier that I made that decision. Signing the documents that were set before me would have nearly tripled the sticker price of the home. While I stood back and watched the housing market over the past 10 years, I can honestly say - right now the grass is greener in my rented yard, while my landlord stuggles with the rising interest rates and increasing mortgage payments.

Colorado Enacts Mortgage Licensing Regulations

Colorado becomes the 49th state in the U.S. to enact licensing or registrations of mortgage brokers, leaving Alaska as the last state lacking regulation on the mortgage industry. Governor Bill Owens signed the house bill enacting the Mortgage Broker Registration Act, which will require a mortgage broker (as defined below) to register with the state by January 1, 2007, although the act went into effect July 1, 2006.

The act defines a mortgage broker as anyone negotiating, originating, or offers to attempt to negotiate or originate. Originate (under the act) means to submit an applications or documentation to a lender or underwriter in an attempt to obtain a loan. After January 1, 2007 a person may not broker a mortgage, offer to broker a mortgage, act as a mortgage broker, or offer to act as a mortgage broker without first obtaining registration through the state of Colorado.

The act will also require registrants to pass a criminal background check, submit a disclosure of specified administrative discipline, and application fee, fingerprints, and a $25,000 bond or equivalent alternative. It also establishes criminal penalties for those who engage in any of these regulated activities without first obtaining the proper registration.

A Great Write-Up on the Right of Rescission

Some mortgage transactions are subject to a three day "cooling off" period allowing the borrower to essentially back out of the loan before the money is actually received. I found an article that clearly explains what types of loans are subject to this cooling period, and what types are not - and why.

Originally set up to protect borrowers from unethical business tactics by lenders and mortgage professionals, the laws also provide for borrowers who may wake up and decide they have made a bad financial decision. But more often than not - it's being used to undo a bad financial decision. I have not seen this right excercised very often, but when I have - it was usually not due to fraudulent activity on the part of the lenders. But it is comforting to know - especially with my week long report on foreclosure scams (which often involve equity loans, in which these laws and rights apply) - that you can consult an attorney with the paperwork that you signed, and you would have three days to "cancel" the loan. Read the article by Holden Lewis, of Bankrate.com

It's actually a reality check. I can understand the young kids making quick descisions, such as a drunken choice of what to pierce . . . And even marriage has a "cooling off" period of it's own - during which the marriage can be annulled. But an escrow takes a while - if you can see the train wreck coming for 30-60 days, geez, get out of the way! Don't wait for it to hit you