Government Mortgage Plans – Reforms Make Mortgage Lenders Transparent
Lax lending policies and low document loans where applicants did not need to substantiate their income played a major part in the real estate collapse beginning at the end of 2007. Mortgage lenders made questionable loans to unqualified buyers, which in turn contributed to the collapse of the housing market.
The Obama Administration quickly installed reforms to the mortgage lenders that demanded full disclosure and complete transparency. Gone are the days of low doc loans, inflated appraisals and surprising fees at the time of closing. Just as mortgage lenders must issue full disclosure, so will borrowers who must furnish tax returns and other information.
Today, mortgage lenders must issue applicants a full disclosure document that details every expense that will confront new buyers en route to their closing. This disclosure statement will include all fees for services and all points charged by the bank. For purchasers shopping for mortgages, these disclosure statements should be studied carefully.
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