Confusion about Home Loans and Mortgage Lenders' Disclosures

Confusion among homeowners due to ineffective and complex
mortgage disclosures resulted in a study by the Federal
Trade Commission in which 800 percent of mortgage customers
were given disclosure forms for an abstract loan. The
message is loud and clear there is a need for easy to read
and comprehensive mortgage terminology.

The study described in an article from Los Angeles Times on
June 14, 2006 by Kathy M. Kristof shows how most borrowers
are perplexed by the complexity of mortgages due to an
unsuccessful explaining of costs and the risks of home
loans as well as a lack in the understanding of the
terminology.

In a press release issued May 7, 2007 by the U.S.
Department of Justice and the Federal Trade Commission
(FTC) the purpose of the joint report, "Competition in the
Real Estate Brokerage Industry," is to inform consumers and
others involved in the industry about important competition
issues involving residential real estate, including the
impact of the Internet, the competitive structure of the
real estate brokerage industry, and obstacles to a more
competitive environment.

In a complicated world that demands constant attention and
offers an array of choices, the fact is, consumers prefer
less choices and simplicity. A number of details lead to
complexity and this can overwhelm consumers. It is all too
common; the more choices we have the more we struggle to
choose.

Have you ever heard of anybody complaining about the
bundling of gas prices? What you don't see is that the
local state and federal government each gets one third or
33 percent of money in taxes, while the oil companies get
ten percent and gas stations get five percent. But no one
seems to care where the money goes.

For the same reason, an itemization of all the details
concerning mortgages can deter consumers from understanding
mortgage's disclosures. Perhaps, a bigger problem is the
deceptive tactics often used by the mortgage lenders to
sell home loans to consumers as shown in the study.

So, the issue here is not just the confusion of terms but
also deception. New companies will resolve the confusion,
including services where real estate agents and lending
professionals can facilitate approval and processing of
loans for customers faster.

Consumers should look for companies like this that provide
a clear diagram of the program class loan amount, total
down payment and closing costs, monthly payments, loan
rate, APR, commission, and agent yield. Borrowers can
identify the loan amount, the upfront cost of the loan,
penalty amounts, the annual percentage rate, the amount of
cash due at closing or the monthly payment, and if the
payment included charges for property taxes and insurance.

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Contact: Kristin Gabriel
323.650.2838
krsitin@dogtorpaco.com
http://www.dogtorpaco.com