“The American people will never again be asked to foot the bill for Wall Street’s mistakes,” Obama said yesterday. This bill is in response to the 2008 financial crisis. The so-called “FinReg” measure will establish an oversight council to monitor risk, set up liquidation powers for large firms and restrict leverage and proprietary trading. It is easily the strictest regulation of the financial sector since the 1930’s.*

To read many, many opinions and digest different perspectives, simply Google, “Financial Regulation Bill”.

May I offer my thoughts about the general direction of the government oversight as a small, independent mortgage broker? Capitol Hill seems to want to help the American people. I applaud that. However, I’m not so sure our politicians understand what’s really happening in our financial institutions. I will say that as a Broker, my industry has self-corrected, and I’m very proud to be a part of that change. We now have to be nationally licensed, and provide full disclosure with our fees. For example, if I disclose to a client that I could make up to 2.5% on a loan, I disclose the maximum amount of my earnings. Say your loan amount is $250,000. I could potentially make a total of $6,250.00. Once a loan is locked, it is then that my compensation is set. If my compensation rate increases by .125% or $312.50, I have to re-disclose to my client. Not to mention, once a settlement statement (HUD) is prepared, my initial estimate to my client is compared to the actual numbers on the HUD. If my estimate is off by more than 10%, I am responsible for those overages. The consumer is finally protected in the broker community!

I’m excited to be a part of this movement to increase awareness to my clients, and wish more than anything, I could do a loan for Barney Frank and Christopher Dodd. I also wish all mortgage originators/loan officers/planners would go to a flat fee system, like Realtors (typically Realtors receive 2.8% in Colorado for residential transactions) – wouldn’t that be simpler?

I would love to hear what you think about this new bill and any other thoughts you have about what our country has and is experiencing regarding our economy.

*Sourced USA Today, Reuters, NY Times

Megan McDonald, Licensed Mortgage Planner
Excel Home Lending, Manager
383 Inverness Parkway, Suite 130
Englewood, CO  80112
Cell: 303-717-9995
Off: 303-790-2022
Fax: 303-468-6133