Chris Cantell Discusses Real-Estate: Loan documents go less

by Claudia Sonea

††††††††††††††††††Breaking news, the cause of subprime crisis is complex documentation. Well, maybe I tend to exaggerate, but according to many experts U.S. borrowers have too many papers to read making them to not quite understand what kind of loan they really get and that is why many people now lose their homes as adjustable rate mortgages rise. †††††††††††††††††††The Federal Trade Commission made a research and half of the borrowers it surveyed could not identify their loan amount in mortgage papers, while one-third could not identify their interest rate; two-thirds did not know if their mortgages had prepayment penalties, a feature which can make refinancing impossible. Luke Froeb, a former director of the U.S. Federal Trade Commission's Bureau of Economics, states that given borrowers more information proved to be a bad idea in the last years, because the additional data and legalese has turned the forms into perhaps a dozen pages of fine print. ††††††††††††††††††††††The plan is to determine home mortgage lenders to prepare a short, summary of each loan so consumers actually know what they are signing.Thus the FTC tested simplified versions of the documents with the longest of three pages by interviewing people and it made a big difference (the number of questions answered correctly rose to 80 percent from 61). Furthermore, mortgage brokers (helped kill a 2002 proposal by the Department of Housing and Urban Development to expand mortgage disclosures) expressed their support for the redesign. †Marc Savitt, president-elect of the National Association of Mortgage Brokers, said that all disclosing forms should be standardized for the borrowers to understand easier what they sign. ††††††††††††††††††††††††††The form that the Federal Reserve, Treasury Department, Federal Deposit Insurance Corp and other banking regulators have proposed is made of two pages that summarize monthly payment terms of an adjustable rate mortgage and also include brief descriptions of loan terms such as prepayment penalties, balloon payments and taxes and insurance. Rick Farr, partial owner of United Capital Mortgage Assistance, sustains that in many cases, when lawyers, real estate agents, buyers and sellers gather to close on a sale, the terms of the loan are such that make impossible to be understand by borrowers. †††††††††††††††††††††††††††Sen. Charles Schumer sponsored a 1988 credit card law requiring simpler disclosures on credit cards and he told Reuters that he signed 25 years ago the loan through his banker. Now as a member of the Senate Banking Committee, he has a bill pending that would require lenders to give borrowers a one-page table with information such as the monthly payment and the interest rate. Still Republican Sen. Charles Grassley, of Iowa, thinks that mortgage documents can be made simpler without legislation. ††††††††††††††††††††††††††In an attempt to solve the mortgage market crisis they are trying to make easier to understand disclosures, if that will work we cannot now yet, but don't go away, you will find pretty soon. ††

related story: http://news.yahoo.com/s/nm/20080225/en_nm/oscars_cotillard_dc;_ylt=At9Yrp3XiYef1eHgVi._oiqs0NUE

by Claudia Sonea for PocketNews (http://pocketnews.tv)

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These news are brought to you by CantellTV, its technology partner SigEx Telecom and its founder Chris Cantell. CantellTV is the fastest growing provider of digital broadcasting coupled with enhanced communications, allowing people to easily control, view, upload and share digital content through proprietary interface. CantellTV has relationships with a growing network of international clients delivering millions of videos per day with more than 50,000 new videos uploaded and 200 hours of new TV shows broadcasted daily to a wide range of viewers, from 5 to 7 year olds of LiveCartoons; to 16 to 24 year old active social users of MyJumps; to fortune 50 corporate clients utilizing enhanced broadcasting services. CantellTV is committed to delivering infinite choices to your world of entertainment at the tip of your fingers. Chris Cantell retains consulting arrangements with several pre-IPO companies.

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Posted by: Maria Vidlickova

These news are brought to you by CantellTV, its technology partner SigEx Telecom and its founder Chris Cantell. CantellTV is the fastest growing provider of digital broadcasting coupled with enhanced communications, allowing people to easily control, view, upload and share digital content through proprietary interface. CantellTV has relationships with a growing network of international clients delivering millions of videos per day with more than 50,000 new videos uploaded and 200 hours of new TV shows broadcasted daily to a wide range of viewers, from 5 to 7 year olds of LiveCartoons; to 16 to 24 year old active social users of MyJumps; to fortune 50 corporate clients utilizing enhanced broadcasting services. CantellTV is committed to delivering infinite choices to your world of entertainment at the tip of your fingers. Chris Cantell retains consulting arrangements with several pre-IPO companies.