Magazine article Mortgage Banking , Vol. 67, No. 5
Look for the Mortgage Bankers Association (MBA) to push this year for greater simplification, transparency and financial education focused on the mortgage process as the best way to serve and protect customers, even as the industry petitions federal lawmakers for a uniform national standard to combat predatory lending, MBA's officers and senior staff announced during the association's annual State of the Real Estate Industry press briefing in mid-January.
There is both a genuine need and a business benefit for customers to be better educated about the mortgage lending process, but financial education should be a "shared responsibility" between borrower and lender, noted MBA Chairman John M. Robbins, CMB.
"The mortgage transaction is complex, even for the most educated consumer," said Robbins. "But a well-informed consumer can better navigate the complexity and shop for the mortgage that best fits their needs."
Robbins said he has convened a special MBA task force to come up with recommendations to create a voluntary lender disclosure form designed to improve borrowers' understanding of their mortgage by detailing the advantages and disadvantages of their loan before they sign.
On the legislative front, expect consumer protection to be a top priority of the 110th Congress, in the form of the creation of anti-predatory-lending legislation, predicted Kurt Pfotenhauer, MBA's senior vice president of government affairs.
"There has been for some time a bipartisan recognition of the need for a uniform national standard," said Pfotenhauer. "MBA has long advocated the creation of such a standard, and we're encouraged that [House] Financial Services Committee Chairman [Rep.] Barney Frank [D-Massachusetts] has indeed made that one of his top priorities."
With Frank open to the concept of a uniform national standard, Pfotenhauer said, the debate will shift to whether lenders should be compelled to conform to a "suitability" standard when approving home-loan applicants for various loan programs--something MBA "strongly opposes. …