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Loan Red Flags
Welp. A kid just threw a baseball through your window and ran
away before you could get his parents’ information. Now you need a loan to fix
it. But what if your credit score isn’t exactly a home run? What are you going
to do now?
Booms and Busts
Patricia McCoy and Susan Wachter have posted Why
Cyclicality Matter to Access to Mortgage Credit to SSRN. The paper is
now particularly relevant because of President Trump’s plan to
roll back Dodd-Frank’s regulation of the financial markets, including the
mortgage market. While McCoy and Wachter do not claim that Dodd-Frank solves the
problem of cyclicality in the mortgage market, they do highlight how it reduces
some of the worst excesses in that market. They make a persuasive case that more
work needs to be done to reduce mortgage market cyclicality.
a Predatory Lender?
Consumers are often told to stay away from predatory lenders,
but the problem with that advice is a predatory lender doesn’t advertise
itself as such.
Fortunately, if you’re on guard, you should be able to spot
the signs that will let you know a loan is bad news. If you’re afraid you’re
about to sign your life away on a dotted line, watch for these clues first.
FHA Rollback’s Impact on Homebuyers
Less than an hour after being sworn in as president, Donald
Trump signed his first executive order, eliminating a drop in FHA mortgage
insurance premiums that was to take effect a week later. If the rate reduction
had stayed in place, the average borrower with a $200,000 mortgage backed by the
Federal Housing Administration would have had their mortgage insurance drop by
about $500 per year.
Protection in Trouble under Trump
Last week I asked 100 people in an audience, “How many of
you have heard of the U.S. Consumer Financial Protection Bureau?” Only five
people raised their hands. I’m surprised. In the 240-year history of our
nation, we never had a truly pro-consumer federal agency until five years ago.
It’s working, but now we’re in danger of losing it.