A call for “personal commitment” in the mortgage industry
By Justin Hunter
Most people who obtain or are prospectively seeking
to obtain a mortgage, have little knowledge of the industry.
Sure, it is urged that everyone applying for a mortgage
do his or her homework to avoid being taken advantage
of, but there is only so much knowledge one can cram
in about something as complex as the mortgage process,
within a short period of time.
This results in the average borrower going on the Internet
weeknights before bed and reading basic terms and basic
articles that are involved
with the mortgage industry and process. While basics
are good to know and it can speed up the overall process
if your lender does not have to explain every detail
and term, you are still subject to predatory lending.
While the overwhelming majority of mortgage lenders
are honest with the client’s best interest, there
are a few “bad apples” that have created
a black eye for the lender industry. But the industry
is making a solid effort to protect every potential
borrower, according to Lew Sichelman’s article,
“Robbins Calls for Personal
Commitment,” which was published October 24, 2006
in Realty Times.
“The new chairman of the Mortgage Bankers Association
has called for an ‘industry-wide commitment to
personal responsibility.’”
“Taking over the reins of the MBA at the group's
annual convention in Chicago earlier this week, John
Robbins said the ‘industry must take a leadership
role so our customers receive the best information possible,
allowing them to make an educated decision on the mortgage
program they have selected.’”
Robbins continued to warn that if anyone chooses to
renounce this high importance of responsibility, then
the industry as a whole deserves to receive the persecution
and punitive accusation that will surely follow.
“The chairman of American
Mortgage Network in San Diego said lenders should have
the borrower's best interest at heart, not their own.
The ‘simple litmus test’ should be to ‘always
make sure borrowers have what they need to make the
right choice,’ he said.”
If you ask any mortgage
or loan lender about their commitment to their client
before the meeting, they would all have said that professionalism
and the borrower’s needs are most important, but
those would merely have been regurgitated words.
Now, there is importance, as the matter has been publicly
and nationally addressed. There will be serious repercussions
for anyone who does not uphold this reinvented “personal
commitment” of professionalism to the client (borrower).
“There should be laws to punish the ‘few
bad apples ... that will always exist in any group,
no matter the profession.’ he [Robbins] said.
But the motivation for setting the bar high should not
be to avoid punishment but to ‘fulfill an ideal.’”
Robbins and the rest of mortgage advocates are urging
lenders
to disclose both the risks and rewards associated with
various loan products. Robins said that this should
be done prior to the underwriting process, not just
to comply with the law but to have the borrower’s
best interests. There should be an emotional connection
as to what you would want from a particular loan if
you were in his or her situation.
“It shouldn't be ‘just one more piece of
paper to sign at closing,’ he said.”
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