QA &
with Lisa Donner
EXECUTIVE DIRECTOR
AMERICANS FOR FINANCIAL REFORM
BY DARRICK MENEKEN
Darrick Meneken is an associate editor at Scotsman Guide. Reach him at (800) 297-6061 or darrickm@scotsmanguide.com.
FEATURED TOP ORIGINATOR
Brad Cohen, EagleBank
No. 8 Top Dollar Volume (2010)
BY IVANNA C. SUKKAR, EDITOR
In 2007, as the housing market began its decline, Brad Cohen thought he
would have to sell his custom-built, $3 million home. Rather than succumb
to the market and sell his home at a loss, he decided to fight back.
His solution: “I worked harder than everyone else. That’s what motivates me, to get ahead
and pay off my own mortgage.”
Certainly, his hard work has brought results. Cohen closed 513 loans in 2010, totaling more
than $190.5 million in volume and placing him at No. 8 on Scotsman Guide’s Top Originators
2010 rankings for overall volume and No. 12 for most loans closed.
In addition to his personal motivation to pay off his mortgage — which he hopes to have paid
off in the next year or two — Cohen says he finds being a mortgage originator fun.
“There were so many shady loan originators in this industry. I like being one that survived
and pride myself on doing a good job,” he says.
“I’ve always done the right thing in life, and it’s paid off.”
The FinePrint
By Richard Smith
LOAN ORIGINATOR
STEARNS LENDING
TIME TO SIMPLIF Y This past May, the Consumer Financial Protection Bu- reau (CFPB) solicited comments on two draft disclo- sure redesigns that combine the good-faith estimate (GFE) and Truth in Lending ( TIL) disclosure at its Know Before You Owe website (
consumerfinance.gov/know beforeyouowe). The changes are mandated by the Dodd-Frank finan- cial-reform act. But more changes to mortgage-disclo- sure forms coming so quickly after major Real Estate Settlement Procedures Act overhaul seemed an open confession to what everyone in the industry had screamed since before Day 1: The current GFE is not consumer-friendly, as proclaimed. Despite my doubts that a newer form would be better, I almost like the new disclosure. Whittling two forms and five pages to one two-page disclosure must be something of an improvement. There are positive changes in the draft mortgage-dis- closure forms. For one, yield-spread premium is not indicated on the form. If this holds up, regulators will take a major step toward reducing consumer confu- sion and finally leveling the disclosure playing field by removing a misleading and distracting obstacle to in- formed consumer choice. Also, the forms actually come close to providing the information consumers want and need: the note rate, the payment and how much money they need to bring to closing.
To make it even more beneficial, I suggest the CFPB:
• Add downpayment to the “Estimated Amount You Will
Pay at Closing” total.
• Drop annual percentage rate (APR) altogether. APR is
not used to calculate payment or total finance costs,
and I think it adds little help to consumers for comparison shopping.
• Show the total monthly payment and break out mort-
gage-insurance premiums, property taxes and insur-
ance in the payment disclosures.
• List upfront mortgage insurance and funding fees
separately in the Loan Estimate Details section.
• Replace the Comparisons field with a distinct presentation of note rate, payment, lender fees and loan-dis-count charges to help consumers compare loan terms.
• Add a signature line.
Industry groups have had positive reactions to the proposed disclosure changes. Marc Savitt, president of
the National Association of Independent Housing Professionals, says combining the GFE and TIL disclosure
is a “common-sense approach to giving consumers the
information they need.”
Mike Anderson, government-affairs chair of the National Association of Mortgage Brokers (NAMB), says
NAMB “applauds the effort of CFPB in developing the
new [disclosure form] and for seeking industry input.”
The bureau will solicit further comments later this summer. I think with industry input, the new disclosure form
could be reduced to one page and actually give consumers useful and clear information about their loan,
which will truly assist them with mortgage shopping.
Richard Smith is a loan originator with Stearns Lending. He
has originated residential mortgages in Tennessee and Georgia since 1994. Smith writes a monthly column on legislative
and regulatory issues for Scotsman Guide. Reach him at (423)
280-0345 or richard@richardsmithhomeloans.com. Visit www.
richardsmithhomeloans.com for more information.
