Mortgage regs

Isn’t it Time to Turn the Lights on in the Mortgage Industry?

The Inuit people brave harsh living conditions. The winters they endure are long and intensely frigid, while summers are short and chilly. Many areas remain covered in ice and snow year-round. But perhaps one of the most difficult circumstances they brave is darkness. They live four months out of the year without a glimpse of the sun. In their language they have a word for complete darkness: taggarik.

The Mortgage Closing Industry Has Also Experienced Long Periods of Darkness.

After speaking with several industry insiders, it became apparent that there was a lack of transparency when buying a home. One even commented, “I was completely in the dark. I had no idea. I just was blindly signing things.” Taggarik, indeed. And, similar to the long winter in the Arctic Circle, the mortgage process can take several months.

The CFPB is attempting to better the process with the new RESPA – TILA disclosures. Their logo looks like a shining flashlight, undoubtedly attempting to symbolize transparency for consumers.

The Mortgage Process Keeps Consumers In the Dark.

In the current process, the ritual of documentation changing hands, determining how much is needed for a down payment, the fees, underwriting the loan, and countless other decisions that need to be made, all come together within the last day closing on the property. On top of that, it isn’t uncommon for the bank to demand $5,000 dollars or more from consumers that they were unaware of until the day before or day of closing.

Consequently, the consumer has limited time to review the finished documents until the final meeting. Many times, consumers may not understand everything or agree to something they don’t want to and are afraid to cause a scene in case it inhibits them getting their home. The disclosure rule is there to give the buyer time to review the numbers three days in advance.

Is three days really long enough?

The sooner banks can provide information to the consumer, the better. The benefit to the consumer and the industry as a whole is there wouldn’t be as much “running into things.” These situations that get in the way often involve key players being out of town at times when information is needed from them. Had they known the information was needed, they would have taken care of it before leaving town.

Is it time to turn the lights on?

Imagine if appraisers, real estate agents, title companies, home inspection companies and all of the groups necessary in the home buying process participated in a secure network. How would a transparent mortgage process change how the industry is organized?

The mortgage closing space does not need to reside in taggarik—let’s turn on the lights.

Want to make your mortgage process easier and more accurate? Contact ATS Secured today.

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