Mortgage fraud, predatory lending and bad conduct by mortgage originators remains a hot topic amongst politicians, regulators, consumer watchdogs and the media. It would appear that the ultimate conclusion is the requirement of a legal mortgage agreement, a mortgage contract or loan contract, signed by both the borrower and the lender.
This mortgage contract would spell out the terms of the loan and woud be signed at the beginning of the loan process not shoved at the borrower at the closing table.
The borrower would then have a legal agreement that holds the broker responsible for what was promised and the broker has a protection from legal action after the fact as the borrower cannot claim they did not know what they were agreeing to when they took out the loan.
If the industry doesn't do this, then the Federal Government will. Real Estate agents use contracts and soon the mortgage industry will need them too. Be on the look out for a new trend... the mortgage contract.