Government Releases a New CHARM
by John Occhi, Realtor
Hemet CA Real Estate
I read this morning that the Federal Reserve Board has published a revision to their book, the Consumer Handbook on Adjustable-Rate Mortgages (the CHARM booklet).
Last month, I published my own article where I discussed some of the different loan options - I did this from the standpoint of a REALTOR looking to help my clients and not as someone looking to earn a commission on every aspect of the real estate transaction. In Hemet CA, where I practice the art of Real Estate I leave the loans to the loan Hemet real estate loan professionals like my friend Joey Aszterbaum, at Patrion Mortgage.
Under the Board's Regulation Z, they require that all lenders provide a copy of the CHARM booklet to any borrower who applies for an adjustable rate mortgage. My understanding is that a suitable substitute is allowed - which may include an electronic PDF version.
A nice feature of the booklet is a Mortgage Shopping Worksheet. This provides a list of what the Board believes are the right questions to ask a lender. I believe all questions are good and the more we can educate the consumer the better off we will all be. Questions should stimulate the thought process and generate more questions then what can be listed. There are a couple dozen of these questions and a form to record the answers for a fixed rate mortgage and several ARMs side-by-side.
I would advise the borrower to ask their lender to help fill out the form and ask the questions directly, to ask the lender for help in filling the form out based on exactly what loan the lender is proposing. This will help solidify the relationship and prevent the old, "you must have misunderstood me" excuse borrowers.
The booklet does a good job of comparing ARMS to other loan products and discusses some of the pros' and cons' of an ARM in comparison to the other products available today. There is also a fairly comprehensive glossary in the back of the booklet, which has got to help.
The booklet, along with others on similar topics is available to order FREE from the Federal Reserve System Publications Catalog. They also have some other books that every REALTOR and mortgage loan professional should be aware of and know the contents of.
Now Have a Blessed Day,
John Occhi, REALTOR®
Your Resource for Hemet CA Real Estate
http://www.johnocchi.com/
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John, at McCue Mortgage, we provide the CHARM booklet as well as additional disclosures on ARMS. BTW I see what you mean about sprinkling in the Kew Words.