Fair Mortgage Practices Act of 2007

Shared by Blue on Mon Aug 06, 2007 7:17 pm
Hi Everyone, I would like to share some information about the Fair Mortgage Practices Act (FMPA) which would result in creation of national system for registering loan originators. And is part of the proposed amendment to the Truth in Lending Act (TILA). The main feature of this bill sponsored by Rep. Spencer Bachus will be a one page disclosure form for all credit plans of consumer. This form will be given to borrowers 3 days before closing wherein loan amount, property's appraised value & how much percentage of the appraised value is being borrowed will have to be disclosed by lender. This form will clearly spell out: Number of years on the loan & maturity date on it with separate section that will explain the initial rate, how long the initial rate would be for and maximum increase the rate can have. Another section will be about borrower's income. This section will clearly highlight borrower's income figure. There would be separate lines to show the percentage of his income that will be consumed if rates were to move up on his loan. One separate section will provide details of special factors that borrower must be aware of like prepayment penalty, fees, points, balloon payments, and closing costs. If you have more information about this bill please share it with us. Thanks Blue Source: http://www.thestreet.com/s/congress-should-require-simple-mortgage-contract/newsanalysis/opinion/10372365.html

Community Members Opinion

miller_st

Joined: 17 Jan 2007

Posts: 917

168.82 Dollars($)

Posted: Thu Aug 09, 2007 6:52 pm Post subject:

National Community Reinvestment Coalition (NCRC), is critical of some of the weak areas of this bill introduced by Spencer Bachus. As an example this bill requires lenders recommend counseling while NCRC finds it more suitable to make it mandatory for borrowers who take subprime loans. In addition to it this act preempts state laws on escrow requirements. NCRC is in favor of bill that will not preempt any existing state laws. Those who are interested to read more about NCRC's viewpoint on this bill can go to this page: http://www.ncrc.org/policy/ncrchomecampaign.htm Miller

Samantha

Joined: 16 Sep 2005

Community Mentor
Posts: 1514
Location: MASSACHUSETTS

132.40 Dollars($)

Posted: Fri Aug 10, 2007 3:14 am Post subject: RE: Fair Mortgage Practices Act

I believe the bill if effective as law would play an important role in reducing the mortgage mess that often results due to lenders making borrowers qualify and the latter not reading the fine print. By ignoring the fine print, borrowers often come across troubles in their mortgage. They realize that they cannot make way for such a high monthly payment but when they signed the document they have hardly noticed when the rate would increase and how it would adjust. However, if the bill is passed and the government enforces the law, then it will make things clearer as it has reduced the number of documents one has to go through at the time of taking a loan. And, I feel, borrowers will be comfortable reading what is mentioned in the disclosure provided as per the new law if being effective. god bless Samantha _________________ Know how to compare lenders with mortgage booklet


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