Comments on: Mortgages & Lending Reform http://www.fhaloanpros.com/2007/11/fha-mortgages-lending-reform/ The Unofficial Guide to FHA Loans & Mortgages Mon, 01 Dec 2008 22:14:26 +0000 http://wordpress.org/?v=2.6 By: Peter G. Miller http://www.fhaloanpros.com/2007/11/fha-mortgages-lending-reform/#comment-696 Peter G. Miller Fri, 02 Nov 2007 11:37:28 +0000 http://www.fhaloanpros.com/2007/10/fha-mortgages-lending-reform/#comment-696 Let's try this again: Do you think raising FHA ARM loan caps from 1/5 to 2/6 as a result of lender pressure has contributed in any way to FHA foreclosure rates? Yes or no. If yes, do you agree that the caps should be returned to prior levels? Yes or no. Do you believe lenders have no systemic responsibility for the current mortgage meltdown and no change is necessary? Yes or no. Let’s try this again:

Do you think raising FHA ARM loan caps from 1/5 to 2/6 as a result of lender pressure has contributed in any way to FHA foreclosure rates? Yes or no. If yes, do you agree that the caps should be returned to prior levels? Yes or no.

Do you believe lenders have no systemic responsibility for the current mortgage meltdown and no change is necessary? Yes or no.

]]> By: Prof. Samuel D. Bornstein http://www.fhaloanpros.com/2007/11/fha-mortgages-lending-reform/#comment-690 Prof. Samuel D. Bornstein Fri, 02 Nov 2007 03:04:44 +0000 http://www.fhaloanpros.com/2007/10/fha-mortgages-lending-reform/#comment-690 It is my hope that any new mortgage legislation will prevent the abuses that occurred in the past. I would immagine that with appropriate penalties in place, the abuses will cease. However, as I stated in previous posts, it is time to offer not only subprime borrowers..but all borrowers, guidance in monitoring their financial health. The tragedies of this crisis may have been lessened if the borrower were made aware of what it took to be able to make the mortgage payments. Everyone will admit, we live in a complex financial environment, surely one cannot argue that we all need to gain an understanding of our spending and credit decisions and how they impact our lives. I must emphasis that if the borrower's Housing Expense Ratio had been taken, he/she would have realized that the monthly payments(including taxes, insurance, utilities,etc. were higher than the recognized safe range, this boorower would not have taken on the mortgage. It is this knowledge that is critical to avoid failure. I have proposed this idea to the Federal Reserve Board in their request for comments at their HOEPA hearing in June,2007. It may be worthwhile to consider this as a solution to this crisis, especially at this time when millions are at risk. It is my hope that any new mortgage legislation will prevent the abuses that occurred in the past. I would immagine that with appropriate penalties in place, the abuses will cease. However, as I stated in previous posts, it is time to offer not only subprime borrowers..but all borrowers, guidance in monitoring their financial health. The tragedies of this crisis may have been lessened if the borrower were made aware of what it took to be able to make the mortgage payments. Everyone will admit, we live in a complex financial environment, surely one cannot argue that we all need to gain an understanding of our spending and credit decisions and how they impact our lives. I must emphasis that if the borrower’s Housing Expense Ratio had been taken, he/she would have realized that the monthly payments(including taxes, insurance, utilities,etc. were higher than the recognized safe range, this boorower would not have taken on the mortgage. It is this knowledge that is critical to avoid failure. I have proposed this idea to the Federal Reserve Board in their request for comments at their HOEPA hearing in June,2007. It may be worthwhile to consider this as a solution to this crisis, especially at this time when millions are at risk.

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