I am frustrated with the current Good Faith Estimate (GFE) but not for the reasons that most people rant about. The flaws of the new document are well documented and I won't bother with reiterating what many have already adequately and eloquently addressed.
My frustration is with the timing of the GFE. As many of you know, there are six required elements to be present before a GFE can be provided. And herein lies my first real issue. There is absolutely no uniformity present about what is to be presented to the consumer PRIOR to all six elements that make up an application. Understandably, most consumers would like to know the costs of a loan PRIOR to putting in an offer on a house. Is it too much to ask to have an actual document that is uniform that can be provided prior to issuing a GFE? Right now I am seeing RESPA violations left and right as Loan Officers are giving out documents that are clearly not permitted with RESPA. This leads to my second point.
We are all being led to believe that much of the meltdown could have been prevented had we adapted different disclosures earlier. This is utter nonsense. The prior disclosures, the prior laws, the prior penalties were all sufficient. I could even argue that having less disclosures would benefit our industry more than continuously adding new ones. Consumers are completely overwhelmed with the paperwork. Less is more.
The problem is ultimately enforcement. Had the previous laws and regulations been monitored and enforced there very well could have been a different outcome with the housing market. But they weren't. And guess what? The new laws and regulations aren't being enforced either. New forms, new regulations etc will not solve anything. What we need now is what we needed before - enforcement.
Give us something tangible and simple. For example, give us an email to send examples of a company or Loan Officer that has violated RESPA. Reward us a small sum that is a portion of the penalty to be paid by the violating Loan Officer and/or company.
When we are bombarded with statistics saying loan fraud is up 300% I can't help but laugh. Fraud is notably down from four to five years ago. What is up is enforcement. Had more efforts been made to enforce laws four to five years ago I guarantee that fraud numbers would have gone up then too.
So what do I want out of this? First and foremost, if you are an agent, reward the Loan Officers that are conducting business ethically. Second, if you are a Loan Officer, do things the right way. Third, if you are a mortgage company, do what many of us have already done - read the FAQs.
And Jeff Merkley, please do us all a favor - learn something about our industry. Educate yourself. Resist the urge to draft laws that create headlines but lack insight or knowledge. Laws put in place for political collateral cause irreparable harm to those that you are supposed to be serving.