HR 3915 Congress Proposal May Be to Your Detriment

Maybe you’ve heard about all the Hoopla going on in Congress about Preditory Lending over the last couple of weeks.  The Financial Service’s Committee passed this Bill onto the Full House this week for further debate and potential edit.

One feature of the Bill which quite frankly was designed to help the consumer, may in fact, cause more harm than good.  Specifically, one aspect of the Bill calls for disallowing the financing of closing costs when a borrower wants or needs to refinance their home.

Say for example that you are seeking a new mortgage in the amount of $ 250,000 with say $ 4,000.00 in closing costs ( Remember this is an example).  A section of this Bill would prohibit any financing of closing costs by the client or lender.  End result, client needs to bring in $ 4,000.00 out of pocket to close the refinance.

Now I certainly am one that favors looking out for the consumer with respect to competitive rates and fees, but this one aspect of the Bill is beyond my scope.  Rather than helping the borrower, in many cases this part of the Legislation will create more undue hardship than what I believe was originally intended.

 Then again, we are dealing with Politicians here.  For more information regarding this Bill, go to www.NAMB.org.  If you disagree with some or any of the findings on this Bill, let your Congressman know your thoughts about this Bill.