|
|
 |
|
|
|
register |
bbs |
search |
rss |
faq |
about
|
|
|
meet up |
add to del.icio.us |
digg it
|
|
|
|
Quicker Home Loans
FIGHT BACK! BY DAVID HOROWITZ
Quicker Home Loans
Applying for a home-mortgage loan may soon be as quick and easy as getting a car loan.
And that would certainly be an improvement. Right now, getting a home loan involves piles of
paperwork and may take as long as six weeks to be approved. And if the loan is turned down,
the buyer must start all over again with another lender. But if car dealers can clear a loan in a atter of minutes, why can't banks?
The answer is, they can. A few can, at least. Several banks in California are now
experimenting with fast-track home loans by computer. The basic application and financial
disclosure is still done by hand. But as soon as the loan officer enters that information on a
laptop computer, the process goes into high speed.
The data goes from the bank's computer by modem to the Federal Home Loan Mortgage
Corporation (Freddie Mac) in Virginia. Freddie Mac then calls up the borrower's credit history,
compares it with the information on the application and assigns that borrower a credit score.
Within a few minutes, Freddie Mac's computer comes back to the bank with the score, and the
loan officer makes the final decision.
Less time and less paperwork means lower costs for mortgage lenders -- $500 to $1,000 on
the average. It remains to be seen if the banks will pass those savings on to their customers in
lower loan fees. For the moment, the main advantage seems to be time saved clearing home
loans.
About half the loan applications being run through Freddie Mac right now are coming back
approved. The banks hope that will go up to 75 percent when the system becomes fully
operational some time next year. ***
The Clinton Administration is also pressing federal agencies that regulate banks and
savings and loans to overhaul the Community Reinvestment Act of 1977. That law was
supposed to make more loans available to low income and minority borrowers. But critics say it's
generated more paperwork than loans over the past 17 years.
When bank regulators drew up their first proposal last December, they were inundated with
more than 6,700 letters from lenders pleading for more flexibility in meeting the re- quirements ofthe law. The revised version meets many of their objections, but has also drawn fire from both
banks and community development groups.
While some bankers like the proposed rules, others complain that it will actually increase eporting and paper- work, especially for larger lending institutions. At the same time, consumer
advocates say that by loosening regulations, the government sold out to the lenders and made it
easier for them to avoid providing full financial services to poorer communities.
The revisions in the law are mostly technical. They would change the way regulators
measure lenders' compliance with the Community Reinvestment Act. The real test will come
after July 1 of next year, when the new rules are scheduled to take effect. Then we'll see if
banks follow through with their promise to improve financial services and loans in inner city
neighborhoods.
If you have any questions or comments, please write to David Horowitz in the Consumer
Forum+ (go FIGHTBACK). COPYRIGHT 1994 CREATORS SYNDICATE, INC.
|
|
|
To the best of our knowledge, the text on this page may be freely reproduced and distributed.
If you have any questions about this, please check out our Copyright Policy.
totse.com certificate signatures
|
|
|
About | Advertise | Bad Ideas | Community | Contact Us | Copyright Policy | Drugs | Ego | Erotica
FAQ | Fringe | Link to totse.com | Search | Society | Submissions | Technology
|
|
|
|
|
|
