Juicy Estates: Mortgage Blog

If You Disagree With Me It’s Because You Are Wrong

The aptly described “most interesting man in the world” has yet again, through the use of narration, coined a new mantra for the current generation.  ”If you disagree with him it is because you are wrong” is a most succinct description of the current socio-political environment.  Regardless if you are discussing the massive amount of tax payer dollars spent on the bailout or the pros and cons of health care reform it is clear that the national discourse on all major issues has deteriorated into a school yard game name calling and general disrespect.  The major political parties have both taken the stance of “if the other side proposes it then we oppose it”.

I am certain that the most interesting man in the world wouldn’t discuss money or politics in mixed company but then again he enjoys of the luxury of being a work of fiction.  We on the other hand do not enjoy this luxury and therefore must wallow in the proverbial mud if we want to express an opinion on topics usually reserved for talking heads and the lunatic fringe.

What does this have to do with Jumbo mortgages or South Florida real estate….actually a good bit.  You see we are entering into a regulatory environment where the compliance threshold will be so high that it will preclude many from engaging in otherwise good business and at the same time we are entering into an economic environment where the expansion and inflation will be the order of the day.  Don’t misinterpret this to mean that I do not support increased regulation of the financial markets, I do as the markets have clearly illustrated that left alone they will run amok.  However increased regulatory thresholds need to be sensitive to how business gets done not how partially informed politicians think business should get done.

In my opinion the new regulations being put in place regarding the real estate and mortgage industries are not only ineffective but damaging.  The vast majority of the new Reg-Z and HVCC regulations not only fail to defend the consumers interest but in many cases hurt it.

For example Reg-Z’s focus on APR disclosures when anyone with an understanding of how APR is calculated will tell you that it is in most instances a meaningless calculation devised by politicians not mathematicians.  This issue could be resolved by incorporating a time element into the Truth In Lending/APR disclosure.  Given that the average lifespan of a mortgage in the US is only 4 or 5 years I would suggest that the APR be calculated and disclosed in 3, 5, 10 and life of loan time frames to give the consumer a true indication of loan cost.

And HVCC  a real gem ensuring the delivery of inferior quality appraisal reports through a process that forces appraisers to cover a larger geographic area in order to make a living.  A possible fix here would be to repeal the misconceived HVCC in favor of actually enforcing the rules and regulations set forth by USPAP.  A national appraisal certification standard should be put in place under the underfunded yet watchful eye of the Appraisal Foundation.

I think that the most interesting man in the world, while sipping a cold Dos Equis, would be interested in what you have to say on these topics so I invite you to share your opinions free of the fear of retribution.

This entry was posted on Tuesday, September 15th, 2009 at 6:22 am and is filed under Home, Mortgage News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. Victor Mills said at September 16th, 2009 at 2:12 pm

   I happen to agree. (to wallow in the proverbial mud a bit) If only there was a Tres Equis… Reg-Z, HVCC and the CU.

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