GFE 2010, Irony, Hypocrisy or Worse?
Ever hear that Alanis Morisette song, ” ironic” ? The funny thing about it was that the lyrics didn’t pose much if any irony leaving the only irony to be that she wrote a song about a word but didn’t really know what the word means.. - Ex. “A black fly, in my Chardonnay” or “it’s like rain……, on your wedding day” Rather, these were mostly just examples of plain old bad luck.
Reminds me of the mortgage industry’s own misfortune now that HUD, albeit with good intentions but poor execution, has laid down the law to try to help protect consumers when they engage in the mortgage process. Seems to me that they have their own other worldly definition of protection or enlightenment and all they’ve really done is to encumber and confuse the process.
On the one hand, it only takes six pretty basic pieces of information to constitute an application which triggers the requirement of providing a GFE within 3 days. That GFE stipulates that an interest rate and closing costs be for the most part guaranteed. While at the same time, it’s impossible to know all of the hundreds of intimate details only discernible by comprehensive analysis and discovery (credit reports, appraisals, verifications, underwriting, title examinations, etc.) necessary to prudently come to the contractual conclusion that this form mandates.
To make it all the more difficult, over at Fannie and Freddie’s offices (aren’t these pretty much now a branch of the government?) they have these things referred to as Loan Level Price Adjustments. Add in a little HVCC – you know, that protection for the consumer which has stripped them of that nasty thing called “home equity” and you have the recipe for nothing but good intentions gone bad.
So has HUD become the Department of Unbridled Hypocrisy (DUH)? Or are they smarter than we think and secretly wringing their hands over punishing the industry when in reality, those that deserved it have already left the building?
Too bad that the folks making the rules aren’t the ones witnessing what’s taking place now in our industry from the inside. Gatherings of the best and brightest are taking place at events like the Mortgage Revolution and together, they’ll continue to push for real practical reform that will actually benefit the consumer rather than the aspirations of certain politicians.
In the meantime, it won’t change the rules, but for those of you that like to educate your consumers about the potential pitfalls associated with comparison shopping based on rate quote alone- especially when these are delivered via the Internet or without the benefit of thorough discovery, then here’s a little tool that will help make it easier. Just click on the image to open a PDF and you can then save it to your computer for printing or email distribution.
To twist a line from Alanis, HUD has handed us 10,000 spoons when all we needed was a knife. The ultimate irony would be if we use those spoons to cut through the bureaucracy and red tape to deliver to our customers what they really want and need - good honest service, intelligent & well suited advice and all delivered at a fair and appropriate price.