Less Choice = Less Chance

Mortgage and Lending with Guaranteed Rate, Marin County, CA NMLS: 22343
RPM Mortgage in California

Less Choice = Less Chance

I haven't gotten one of these e-mails (below) in a number of years.  Well, since 2008 to be precise.  Perhaps you recall where you were during real estate's protracted 9/11, a period when the housing industry was imploding and we didn't know who would be left when the smoke had cleared.
How's this for a walk down The Nightmare on Elm St.?
"Several weeks ago, SunTrust Mortgage, like many competitors, announced that we will realign our business to a smaller overall mortgage market.  As mortgage lending has become more complex and increased interest rates have reduced refinance volume, we must sharpen our business focus and a few key areas.
To this end, we will cease Mortgage Broker Lending, effective December 31, 2013. 
This was a difficult decision, given how long we have been in Broker Mortgage Lending and the loyal relationships we have developed."
I want you to focus on a key phrase above:  "As mortgage lending has become more complex..."  Put through my BS meter, this should instead read:  'The oppressive and ill-conceived regulatory reform of Dodd-Frank, coupled with the very real possibility of a staggeringly costly CFPB audit, has led us to believe it is less risky to leave this channel of business altogether than make loans compliant with rules nobody yet fully understands.'
And the rules?  Yep, the same ones aimed at "protecting the consumer."
Many of us in the industry have feared that Dodd-Frank financial reform will not primarily and effectively prevent future sins.  The too big to fail banks are bigger now than they were then.  The rules will, however, directly and immediately prevent present choice.  This is EXACTLY what I see happening above and it's a sobering consequence of what our legislators continue to fail to grasp.  We cannot grow and return to health when reducing the chance of negligence is brought about by reducing choice in the marketplace.  You cannot retroactively right the wrongs by actively restricting the good that remains.  In the end, the consumer always loses.  I brokered but a handful of loans to Suntrust in all my years of lending, but even so, losing an option is always a bad thing and I hate to see them go.
And we all deserve better.


Robert J. Spinosa

Home Loan Professional
BRE: 01297944 NMLS: 22343

1058 Redwood Highway
Mill Valley, CA 94941

877.270.5959 Toll Free
415.367.5959 Cellular
415.366.1590 eFax

Rob Spinosa



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Ralph Gorgoglione
Maui Life Homes / Metro Life Homes - Kihei, HI
Hawaii and California Real Estate (310) 497-9407

Robert, thank you for sharing your thoughts on this scary situation.

Oct 30, 2013 10:58 AM #1
Carla Harbert
www.LorainCountyHomeSales.com - Avon, OH
RE/MAX Omega: Lorain-Medina County Area

Often times, yes...the consumer loses.  Where is the justice in all of this?

Oct 30, 2013 11:55 AM #2
Rob Spinosa
Guaranteed Rate, Marin County, CA - San Anselmo, CA
Vice President of Mortgage Lending, Marin County

Thanks Ralph, thanks Carla.  It is a scary situation and there is no justice in it.  Losing lender options doesn't happen in a vacuum.  If a big player like Suntrust is getting out, as the saying goes, "there is never just one cockroach."

Oct 30, 2013 12:47 PM #3
Kathy Sheehan
Bay Equity, LLC 770-634-4021 - Atlanta, GA
Senior Loan Officer
The enactment of the Safe Act has done more harm than good in my opinion.
Oct 30, 2013 01:05 PM #4
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

I so understand your frustration. I am going to keep blogging on these topics as the consumers will be the ones that continue to be hurt by more and more government regulation that keep indicating that the consumer needs protecting.

Nov 06, 2013 09:24 AM #5
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Rob Spinosa

Vice President of Mortgage Lending, Marin County
Can I Get a Jumbo Loan with 10% Down?
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