Palm Beach Real Estate and Loans

Most people realize that there is quite a bit that needs to be cleaned up in the Mortgage Business - especially in Florida where the existence of fraud is over twice the National average.

A new law takes effect today - SB 1824 - that makes lending rules stricter and also increases the penalties for violations.

There certainly are plenty of ethical people in the business, but those that continue to 'stretch' the rules are (hopefully) going to be delt with much more severely.

Included in the new law- as mentioned in today's Florida Association of Realtors® report:

• Law enforcement is provided greater powers to combat mortgage fraud, which now expressly includes "any material misstatement, misrepresentation or omission" knowingly made in the mortgage lending process, with an intent to defraud
• Borrowers must be told how much a lender pays a mortgage broker, and it must be in writing (this is the Yield Spread Premium that you hear so much about - up until now, it was alright to disclose an estimate - but now, as soon as the exact amount is known it must be disclosed)
• the Good Faith Estimate (GFE) must disclose all possible fees from EVERY party involved in the Mortgage (I always thought that you had to do it anyway!)
• If the terms of the loan change, the Borrower must be notified no later than 3 days before closing AND the mortgage broker must be able to prove that the notice was provided and the borrower accepted the new terms.

I've never been one for increased governmental control - but the mortgage situation in Florida has gotten so ridiculous that it has become necessary.

Hopefully the new laws will be enforced.