Customers seeking a better mortgage or a better mortgage refinance loan have been finding greater success online with a company called iWantaBetterMortgage.Com. By cutting out the mortgage broker, iWantaBetterMortgage.Com offers customers a quick and easy way to shop online for a home mortgage. For years (and industry wide), there have always been problems with mortgage brokers selling mortgages with inflated fees and interest rates higher than a customer would need to pay. Over the years, customers have complained that mortgage brokers had talked them into getting a mortgage that they really could not afford, only find out after the fact that the mortgage lenders had hid the additional back end points and fees causing the interest rate to skyrocket. In many cases, a better mortgage could have been obtained had the customer been able to shop around. Because of this, iWantaBetterMortgage.Com has begun to capture additional market share providing the customer with that “better mortgage”.
With the new Dodd Frank rules that are in place, some mortgage lenders are being forced to not lend to qualified individuals. iWantaBetterMortgage.Com is helping customers shop multiple lenders at one time which can help eliminate the add on fees that come from independent mortgage brokers.
The new term on the street is “qualified mortgage”. Mortgage lenders are now forced to abide by a set of rules that results in what is being called the “qualified mortgage standard”. Mortgage lenders are now finding it difficult to add on additional fees, both on the front and the back end. Without these additional fees, lenders are denying home loans to an otherwise qualified borrower. So, how does a customer find that “Better Mortgage”? Consumers want a better mortgage and have begun to turn to iWantaBetterMortgage.Com.
More regulations mean fewer better mortgages.
Mortgage lenders don’t like the limits being placed on their fees, or the new debt to income requirements for a mortgage to meet the “qualified mortgage standard”. The issue at hand is that the mortgage lenders are complaining that they’ll turn away qualified deserving borrowers because of these new regulations. Lenders believe that this will slow the housing recovery and hurt the overall health of the economy. iWantaBetterMortgage.Com is now providing the link between the consumer and the lender whereby the consumer can pit home loan lenders against each other, thus lowering fees and points. Getting that better mortgage is critical to a healthy industry.
“Unless there are changes in the near future, these new rules and regulations would have a dramatic impact on credit availability for the consumers seeking a better mortgage that they are in place to protect,” said Edward Brooks, of the United Mortgage Association. He’s said that this is where a company like iWantaBetterMortgage comes in. iWantaBetterMortgage.Com takes the guesswork out of finding the best home loan for the individuals credit rating. iWantaBetterMortgage.Com can get a pre-approval for a home mortgage in less than two minutes.
Brooks testified in front of a House Hearing on home mortgages that business is improving with the high end borrower, while the lower end of the mortgage market is actually shrinking. Access to credit continues to be a problem with first time and low to moderate income borrowers unable to qualify for a home mortgage. The “ability to repay” rule could fuel this trend and further tighten credit to worthy borrowers.
How do the new rules for a qualified mortgage make it a better mortgage?
Early this year, the Consumer Financial Protection Bureau’s “qualified mortgage rule” went into effect. This rue is designed to help the consumer get a better mortgage. To be designated a qualified mortgage, a loan must fulfill certain requirements, including:
- A 3 percent cap on points and lender’s fees for loan amounts of $100,000 or more.
- A maximum debt-to-income ratio of 43 percent, meaning that debt payments can’t exceed 43 percent of the borrower’s before-tax income.
However, there are exceptions. The percentage cap on fees is higher for smaller loans, and some mortgages backed by Fannie Mae, Freddie Mac and the FHA can have debt-to-income ratios above 43 percent.
In a testimony in front of the House Banking Committee, some lenders complained about the 43 percent limit for debt to income ratios. They said in many cases, borrowers can get a better mortgage and afford loans at higher ratios, and wanted to be allowed leeway in their lending decisions, and not attach a hard debt to income ratio to the process. Further, lenders had asked for a debt-to-income ratio number for clarity and are now complaining about it.
What does this means for the rural borrowers?
Alfred Winningham, testifying on behalf of the Rural Bankers Association, said that the new qualified mortgage rule will restrict mortgage lending in rural areas. Mr. Winningham’s bank can’t afford the legal risks of expanding its lending efforts, although his bank is exempt from some of the rules because it underwrites fewer than 500 mortgages a year. But in 2012, Winningham’s bank closed 441 mortgages, which will leave little room for growth in mortgage lending side.
Where do Credit unions fit in?
Jenny Maloney, representing the American Credit Union Association, testified that current regulations create a costly and unnecessary “compliance burden.” She pointed out that “Credit unions didn’t cause the financial crisis and shouldn’t be caught in the crosshairs of regulations aimed at those entities that did.” Ms. Maloney testified that getting a better mortgage can be accomplished using online resources like iWantaBetterMortgage.Com. Companies like these can help lower costs industry wide on both the consumer and mortgage lenders end. It’s a win-win for the industry.
Whose risk is it, anyway?
It all comes down this: if the objective is to help the consumers locate a better mortgage, who should assume the risk of a bad mortgage? In past years, mortgage lenders made a lot of money giving people bad loans, and taxpayers and individual homeowners paid the bill. Congress and regulators pushed the risk back onto lenders and investors, who are now pushing back. To have a fair balance, consumers need to have the tools necessary to evaluate home loan products in an open environment. Finding a better mortgage is now easier than ever with companies like iWantaBetterMortgage.Com.
How are markets changing and where are customers going?
Not so new to the lending industry, but gaining ground fast is iWantaBetterMortgage.Com. iWantaBettterMortgage.Com is positioning itself as a major player in the Home Mortgage Lending business. Customers are demanding better mortgage products and are now finding it easier to bypass traditional mortgage brokers and go directly to the lender of their choice.