Anybody that has tried to get anything done with their mortgage recently understands that things have been moving a little slow. Well good news, the politicians in all their infinite wisdom decided that you the consumer need EVEN MORE TIME to make a proper decision about your mortgage. The fact that on average a mortgage takes 3-4 weeks to complete and that after you sign documents on a refinance; you still have an additional 3 days to decide whether or not you want the new loan.
The Home Economic Recovery Act (See the name even sounds good) or HERA as it is also known, went into effect on July 30, 2009. On average we are expecting that HERA will add 5 to 10 days for your new mortgage to close. What that really means is that now instead of being able to lock rates for 30 days, many loans will have to be locked now for 45 days. The longer the lock, the more it costs.
Now I understand what the intention behind this new law was to try and protect consumers but they are going about it the wrong way. There are enough laws on the book. What would be more helpful to consumers would be to enforce the existing laws. All the laws in the world mean nothing if they are not enforced.
Something that would make more sense is giving the consumer a way to file a complaint if they feel they were tricked or lied to. If the Department of Real Estate received enough complaints, then they could investigate a particular broker’s business, instead of changing the rules to punish everyone. Because as I have stated before, those people who obey the existing laws will obey the new laws and those who don’t obey the existing laws, will not obey the new ones either. They will just figure out a way around them.
