 mtgfixit
Joined: 13 Apr 2009
Posts: 73
27.91 Dollars($)
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 Posted: Fri Apr 17, 2009 8:46 pm Post subject: Call your State Senator by Tuesday and ask for a No Vote!!! |
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Call or contact your State Senator by Tuesday, to ask for a NO VOTE on HB705. Call the Senate Only Take Action!
They are looking to expand SB1167 Counseling to Will, Kane and Peoria Counties
HB705
Talking Points
1) Report claim: Interest only loans, negative amortization loans, loans with points and fees over 5%, prepayment penalties, and adjustable rate loans are being offered in the market. Only 2.4% of all loans entered into the APLD have required counseling. This indicates that, since the inception of the APLD, loan originators have been reluctant to utilize these types of products, resulting in better loans for Illinois
Fact: Lenders are offering interest only loans to borrowers with high credit scores.
Fact: Lenders began eliminating negative amortization loans in the fall of '07 and today are non-existent.
Fact: Loans that were made above the 5% limit have been non-existent since 2001.
Fact: Pre-payment penalties on high-risk loan stopped in late 2007.
Fact: Loan originators cannot offer a product, the market eliminated BEFORE the successful launch of the database on July 1, 2008.
2) Report claim: 72 loans have failed to close after the borrowers attended counseling. 62 of these have not been accessed by a closing agent. It could be assumed that, in at least some cases, the borrower did not close the loan because of the advice provided by the counselor or increased awareness on the part of the borrower.
Fact: People did not close because they decided not to close on that product.
Fact: Due to increased underwriting guidelines, most of those loans did not close because the lender declined the loan.
Fact: Borrowers decided to go to another lender source for their loan because they could secure an interest only loan and not have to go to counseling.
Fact: Life changes from the origination of a loan to the close of the loan and a natural percentage of fallout happens.
Fact: Loans in some cases have to be reloaded by the originator, because of program requirements by IDFPR. There are some loans that once the title company opens the file and find out the counseling was required the loan originator changed the program, thus the first loan would show it did not close. This included errors in keying information, once the Tax ID was loaded and was incorrect, they had to re-key the whole loan.
Fact: Again, assumptions based on this data cannot be substantiated nor disputed.
3) Report Claim: The statement that there is no evidence that the SB1167 has not impeded business.
Fact: Due to market conditions not SB1167, the industry experienced a 60% retraction. The pressure on counseling was not there, because there weren't as many loans.
Fact: Borrowers went to federally and state chartered banks to secure interest only loans, because credit counseling is not mandated.
Fact: 70% of the loans were originated by exempt entities. There is no data to analyze because the banks that originated 70% of the business are exempt from this law.
4) Increased Cost To Borrowers
Fact: Borrowers, regardless of the loan program they choose in the affected counties are incurring an additional $100 to $200. in extra Title charges.
Fact: A borrower choosing a loan program on a $250,000 loan that requires counseling, impacts the costs to the borrower on the loan in terms of longer lock period. The longer lock relates to an 1/8% increase in interest rate, to allow enough time for counseling, thus increasing the interest paid by the borrower over the life of the loan by $6,900.
Fact: The increased cost to the borrowers on the 164 loans that required counseling and closed could reach as much as $1,200,000. Consumers are making the choice to close, but are incurring longer lock periods to accommodate the bureaucracy of this program.
5) Additional Facts To Consider
Fact: There is no data proving this law stopped delinquency or foreclosure.
Fact: The assumptions sound great, but the FACTS do not support their claims.
Fact: The money used to develop, maintain and monitor the system could be used to assist more people than it will ever help in what ever the ultimate reason was for the system.
Fact: With the State of Illinois dealing with a massive debt, what is the logical reason to spend additional monies to cover the three new counties and only 30% of the originated mortgages. |
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