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George Mason University Professor Anthony Sanders on the impact on consumers of the CFPB’s new mortgage disclosure rules.
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Surprise surprise yet another government agency running come up with your taxpayer dollars the Consumer Financial Protection Bureau like its name implies.
Sets -- to make things easier for homebuyers.
Their best and brightest spent a year and a half eighteen months researching field testing and drafting.
New mortgage disclosure forms forms.
They say would give consumers greater power over the exciting and -- process of buying -- home.
But in typical government fashion.
They didn't do such a great job they did such a bad job -- fact our next guest says they're doing the exact opposite of what they set out to do to begin what joining me now.
George Mason University finance professor Anthony Sanders professor welcome back to the show -- -- CO.
You know this is like -- the holy Grail of regulators is to get.
Disclosure forms for mortgages that makes sense I know people have tried for decades.
And it's been a difficult thing to do but.
Let's take a look at the number of pages in these new disclosure forms.
The old pages have loan estimate -- there were five pages long now -- three.
The closing disclosure form it was five pages now it's five -- -- net savings of two pieces of paper what do you make of that.
Well that's it very discouraging thing that can really only happen Washington DC.
They've removed the number of papers but they deleted the single most important piece of information for consumers which is the eight PRR annual percentage rate.
So not consumers can't even compare.
Point rate combinations -- you say they also reduce the power -- she is house so.
Well what's happened is with this the Consumer Financial Protection Bureau is they've they've gone through -- -- they've essentially.
Eliminated or reduce any fees on.
Mortgage refinancing.
Prepayment.
And they are now qualifying.
More loans is being risky.
So now people that are kind of on the -- liner cusp of getting along.
CF BC not so fast this -- more risky loans than you thought which means that lenders are gonna look at them say.
And up your that you can't qualify so they're actually reducing mortgage choice.
They're making and -- Bob Barr is going blind they can't look at eight PR.
And this is this is just -- this is ridiculous -- Up up are well you know I do think -- interest saying.
And you knew this is gonna happen right at first there was talk about having plain Vanilla mortgages only right everybody had to have a thirty year fixed rate mortgage.
Now the choices are -- Now -- hit get this special treatment some -- special loan where.
You lock generate for a little bit of time -- any changes over time.
Only people who are really really wealthy can get those special deals what does that mean for consumers is -- Consumer Financial Protection Bureau doing consumers -- favor are they not.
Well I think -- -- like the consumer financial.
Punishment bureau there -- consumers are horrible things.
But here's the funny part Jerry.
Is that his latest said the making gonna make it hard to get loans because they're reducing choice -- may not be able to fit into an easy box that someone wants -- that.
But it now requires you if you're a high risk loan to -- -- mortgage counselor to guide you through the process.
At chaos -- -- senate and work.
You're gonna do that anyway if you are those counselors it's probably some guy in the -- the unemployment line noon yesterday was.
You know working in McDonald's goodness -- Well I think Acorn -- re sprouted itself over this and -- -- consumer financial production bureau RE Anthony thanks for coming on the show tonight we really appreciate it.
Well thanks --
