NAMB Consumer Protection Chair Calls for Simpler Mortgage Disclosure Message delivered in testimony before the Federal Reserve Board
RISMEDIA, July 13, 2006—Creating a simpler mortgage process with clear disclosure of all fees was a consistent theme during testimony by the National Association of Mortgage Brokers (NAMB) at a hearing conducted by the Federal Reserve Bank this week in Atlanta.
Kate Crawford, Chair of NAMB's Consumer Protection and Affordable Housing Committee, represented the association and stated that one of the toughest hurdles in the home buying process is shopping for the right loan.
"Unfortunately, the approved disclosure documents for rate, fees, costs and points can be confusing and overburdened with legalese," said Crawford. "In addition, only mortgage brokers disclose all costs to the consumer. Until there is a uniform way to disclose costs and everyone is fully transparent about their fees it will continue to be difficult for consumers to comparison shop in a meaningful way."
Crawford noted that NAMB has long advocated for a simplified Good Faith estimate that mirrors the HUD-1 closing statement that most homebuyers see when they complete the loan process. By aligning these documents, customers would be able to ensure that the deal they signed up for is the same deal they see at the closing table.
She also addressed the importance of financial literacy education and cracking down on fraudulent lenders. The association continues to support early financial education, starting in middle school, as a long-term solution to addressing mortgage fraud. She said that educated consumers are less likely to be drawn in by fraudulent lenders.
In the short-term, Crawford said that requiring all loan originators to complete criminal background checks would ensure that bad actors are unable to move freely from one distribution channel to another.
The National Association of Mortgage Brokers is the voice of the mortgage broker industry with more than 27,000 members in all 50 states and the District of Columbia. NAMB provides education, certification and government affairs representation for the mortgage broker industry, which originates over 60% of all residential loans in the United States. |
