Hello Ogi,
In this case "the fish rots from the head down" fits this lending case perfectly in evey case. Banks and thrifts and mortgage brokers are required to make loans under the Equal Credit and Fair lending statutes. We are subject to huge fines and penalties if we don't.
From a prior post:
All mortgage brokers and mortgage bankers are mandated to follow these two practices:
The Equal Credit Opportunity Act (ECOA) ensures that all consumers are given an equal chance to obtain credit. This doesn’t mean all consumers who apply for credit get it: Factors such as income, expenses, debt, and credit history are considerations for creditworthiness.
The law protects you when you deal with any creditor who regularly extends credit, including banks, small loan and finance companies, retail and department stores, credit card companies, and credit unions. Anyone involved in granting credit, such as real estate brokers who arrange financing, is covered by the law. Businesses applying for credit also are protected by the law.
When You Apply For Credit, A Creditor May Not...
Discourage you from applying because of your sex, marital status, age, race, national origin, or because you receive public assistance income.
Ask you to reveal your sex, race, national origin, or religion. A creditor may ask you to voluntarily disclose this information (except for religion) if you’re applying for a real estate loan. This information helps federal agencies enforce anti-discrimination laws. You may be asked about your residence or immigration status.
Ask if you’re widowed or divorced. When permitted to ask marital status, a creditor may only use the terms: married, unmarried, or separated.
Ask about your marital status if you’re applying for a separate, unsecured account. A creditor may ask you to provide this information if you live in "community property" states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington. A creditor in any state may ask for this information if you apply for a joint account or one secured by property.
Request information about your spouse, except when your spouse is applying with you; your spouse will be allowed to use the account; you are relying on your spouse’s income or on alimony or child support income from a former spouse; or if you reside in a community property state.
Inquire about your plans for having or raising children.
Ask if you receive alimony, child support, or separate maintenance payments, unless you’re first told that you don’t have to provide this information if you won’t rely on these payments to get credit. A creditor may ask if you have to pay alimony, child support, or separate maintenance payments.>>>>>>>>>
ftc.gov
FAIR Lending:
FAIR LENDING
Discrimination in mortgage LENDING is prohibited by the federal FAIR Housing Act and HUD's Office of FAIR Housing and Equal Opportunity actively enforces those provisions of the law. The FAIR Housing Act makes it unlawful to engage in the following practices based on race, color, national origin, religion, sex, familial status or handicap (disability):
Refuse to make a mortgage loan
Refuse to provide information regarding loans
Impose different terms or conditions on a loan, such as different interest rates, points, or fees
Discriminate in appraising property
Refuse to purchase a loan or set different terms or conditions for purchasing a loan.
hud.gov
So mortgage employees are mandated by federal law to make all the loans that they can fitting the paramters set by the bank and federal reserve themselves that are regulated by these 3 entities:
If your complaint concerns a nationally-chartered bank (National or N.A. will be part of the name), write to:
Comptroller of the Currency
Compliance Management
Mail Stop 7-5
Washington, DC 20219
If your complaint concerns a state-chartered bank that is insured by the Federal Deposit Insurance Corporation but is not a member of the Federal Reserve System, write to:
Federal Deposit Insurance Corporation
Consumer Affairs Division
Washington, DC 20429
If your complaint concerns a federally-chartered or federally-insured savings and loan association, write to:
Office of Thrift Supervision
Consumer Affairs Program
Washington, DC 20552
ftc.gov
These guys primarily enforce and review underwriting standards:
Office of Thrift Supervision
From Wikipedia, the free encyclopedia
Jump to: navigation, search
Office of Thrift Supervision
Agency overview
Formed August 9, 1989
Headquarters Washington, D.C.
Employees 944 (2006)
Agency Executive John M. Reich, Director
Parent agency Department of the Treasury
Website
www.ots.treas.gov
The Office of Thrift Supervision (OTS), an agency of the United States Department of the Treasury, is the primary regulator of federal savings associations (sometimes referred to as federal thrifts). Federal savings associations include both federal savings banks and federal savings and loans. The OTS is also responsible for supervising savings and loan holding companies (SLHCs) and some state-chartered institutions.
The OTS was established by Congress as a bureau of the Department of the Treasury on August 9, 1989 as part of the Financial Institutions Reform, Recovery and Enforcement Act of 1989.>>>
So it is not like these LENDING practices were just sprung on the bank and borrowers by unscrupulous loan officers. The people at the top designed and regulated and overshadowed this mess from the start IMO. The top brass made the rules and they were reviewed by the regulating agencies then the loan officers we were forced to implement them by Equal credit and fair lending statutes. Again it is the top brass that came up with the open field underwriting parameters and the regulators that okayed them that are at fault not the frontline mortgage workers. The public was informed of the terms of their loans, they cannot claim innocence in most cases. They knew about the teaser rates, the future adjustments, the negative amortization and they knew they were lying on applications in order to qualify for more money than they could pay back.
tom
Message 24139431 |
