No need for banks, mortgage bankers for mortgages

If you caught my CNBC segment the other day, I briefly mentioned the idea of eliminating a few steps in the process of getting a loan.<div><br /></div><div>Since the federal government now controls most of the mortgage underwriting standards in the US anyway, let’s try something new and less expensive for the consumer!</div><div><br /></div><div>1. Combine Fannie, Freddie, FHA and VA into one agency.  Make a set of underwriting guidelines that everyone can follow and be consistent.</div><div><br /></div><div>2. Have the U S government guarantee every mortgage because of a small mortgage fee on every loan (like .25 of a point in fee, a la the NY mortgage tax).  This way, if a loan goes into default, the balance of what is not covered by foreclosing is paid in by the fund.</div><div><br /></div><div>3. Licenses, train, bond, background check and check up on loan originators.  Then the licensees can originate a loan and have the government agency fund it directly.  The Feds can then sell the loans off as new-age Mortgage Backed Securities to investors.</div><div><br /></div><div>4. Currently, homes that go to foreclosure that are “rough” can only be bought, in cash, by investors.  How about a program that gives people money to fix the home and a mortgage/inspection contingency so that homeowners can buy more homes!</div><div><br /></div><div>5. Instead of the $7500 credit, how about a direct 5% down payment that is paid back over 15 years with 4% interest for the government.  Then, if you default on the mortgage, your rate would go to 12% and it would come out of your tax refund.  </div><div><br /></div><div>This way, we can get people into homes with low down payments again, but with a real hammer if they don’t pay! </div><div><br /></div><div>6. We can offer a 100% program a la the way VA does it.  Again, if you default, the top 5% would come from your tax refunds!</div><div><br /></div><div>7. If a loan has to go to foreclosure, there will be a limit as to what a loan servicer gets (including legal fees) and when a loan goes more than 60 days, the servicing fee would be shut off unless certain guidelines are met.</div><div><br /></div><div>We need the entire mortgage business restructured, streamlined and made more practical. </div><div><br /></div><div>These items above get it going.</div>

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