Federal Reserve Board's Response To Mortgage Disclosure Conflicts: "not My Job"

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Don't you hate it when you need something done and someone says to you those dreaded three little words

, "not my job"? Makes you want to punch their lights out and question how humanity can be so lazy. Here's a story from the mortgage industry about how a government entity pulled the exact same stunt.

Friends In High Places

Earlier this month I attended a continuing education course that is required for all mortgage brokers in the United States. We were lucky to have Joe Falk as our instructor. He is someone I have learned to have high respect for since earning a mortgage license in 2005. Joe has served in practically every major leadership role in the mortgage industry during his career.

Most recently, Joe has been in a position to represent mortgage professionals and consumers at the table when government officials hold meetings affecting the mortgage industry. He shared some valuable observations which we can summarize and share with you, which may be of interest since many of you are homeowners or aspiring homeowners.
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Obama Administration Getting Hands Dirtier In Mortgage Industry

The government is getting its hands dirtier in the mortgage industry. There are several programs and changes in the works, all of which are attempts to help struggling homeowners, and stimulate purchases of new homes.

One of the most frustrating updates we learned in that mortgage class is that the government is changing the Good Faith Estimate (GFE) and Truth In Lending disclosures (TILA) in an attempt to simplify them for consumers; yes, again.

Federal Reserve Board's Response To Mortgage Disclosure Conflicts: "Not My Job"

Changes to simplify these forms were already enacted recently. For example, the GFE went from 1 page to 3 pages. I guess that's called simplification in government terms. Worse, the Federal Reserve Board and HUD enacted mortgage disclosure rules for the GFE and the TILA disclosure that conflict with each other.

When asked to reconcile the conflicts, the government authorities basically replied, "not my job". They admit creating the problem but chose to do nothing to resolve it. This is what happens when two separate government departments don't play nice together.

Mortgage Disclosure Unification Effort Underway

Now, a mandated effort is underway by the brand new financial regulatory body created by the Obama Administration called the Consumer Financial Protection Bureau (CFPB) to unify the GFE and TILA into one form. The two current forms have overlapping information and can be confusing to consumers. They also needlessly drive up costs and the regulatory burden on lenders. This is what we call job security for government workers!

If you would like to review the proposed formats for the unified disclosure and comment on them, you can visit The Consumer Financial Protection Bureau website. Our team will continue to monitor progress on this unification process and keep readers updated.

by: Nathan Randall

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