Legislation to Stop Reverse Mortgage Fees

June 1, 1997

WASHINGTON, D.C.--Bipartisan legislation designed to save elderly homeowners from paying thousands of dollars in reverse mortgage fees has been proposed by members of the House and the Senate and the secretary of housing and urban development, Andrew Cuomo.

The Elderly Homeowners Loan Protection Act would bar lender dealings with companies that charge exorbitant fees. According to Cuomo, many older Americans are unaware that the companies they've contracted with charge up to 10 percent of the total amount borrowed for information that's readily available from HUD--888/466-3487--at no charge.

The number of victims could grow dramatically, Cuomo says, because companies charging the large fees are aggressively selling franchised distributorships.--Inman News Features

More Consumers Surfing for Mortgages

NEW YORK--Consumers searching for mortgages are turning in increasing numbers to the Internet, Business Week magazine reports.

You can take advantage of this trend by learning how to hunt down mortgages on the Internet and offering that approach to prospects. Business Week says hunting for mortgages online is quick and easy and can also save buyers money (for more about online mortgage information, see "Mortgage Web Sites: More Isn't More," April 1997, page 28).

Who's searching for mortgages online? Business Week says it's often borrowers in rural areas who are trying to avoid traveling to distant locations to find a mortgage loan office. Consumers are also attracted by the anonymity--the process allows them to avoid interacting with a loan officer in person.

Half of Home-Based Businesses Lack Insurance

ALEXANDRIA, Va.--As much as 60 percent of in-home entrepreneurs don't have the necessary insurance coverage to protect their business from theft, damage, and other losses.

A study by the Independent Insurance Agents of America--an association for independent insurance practitioners--also found that

  • Sixty-eight percent of those polled between ages 55 and 64 lack adequate business coverage.
  • Those at high risk of business losses are men (64 percent); entrepreneurs with incomes between $15,000 and $25,000 (77 percent); and residents of the western United States (66 percent).
  • Of those with inadequate protection, 44 percent say they didn't buy business insurance because they mistakenly thought they were already covered under another policy.

Mortgage Gives Sellers Locked-In Interest Rate

PASADENA, Calif.--A new mortgage product offers a benefit for practitioners trying to market houses during periods of rising interest rates.

The Lock 'n Sell program, offered by Countrywide Home Loans Inc., allows sellers to lock in an interest rate on a property for 45 days. If the house sells within the lock period, the buyer receives the locked-in price or the current market value, whichever is less. The buyer then has 45 to 60 days to close the loan.

Lock 'n Sell lets sellers market a specific mortgage interest rate and price when listing a property.

Lenders Work to Clarify Mortgage Process

WASHINGTON, D.C.--Educating potential homebuyers about the mortgage loan process is the goal of a new public awareness campaign sponsored by lenders.

As a result of a survey that showed that four out of 10 homebuyers aren't clear about the loan process, the Mortgage Bankers Association of America has hired the public relations firm of Goddard Claussen to help boost buyer understanding of the mortgage process and the fees involved.

Goddard Claussen, located in Washington, D.C., and California, created the "Harry & Louise" television ads that helped shoot down the Clinton administration's health care proposals.

Online Credit Reports Available to Consumers

LOS ANGELES--Consumers can now order a copy of their Equifax credit report online through a form on the Los Angeles Times home page, http://www.latimes.com, so that they can see the report that mortgage lenders are using to decide whether to grant them a loan.

Information furnished on the form is entered on a secure, encrypted document. The report is mailed within 24 hours.

"Knowing your credit status makes buying a car or home a smoother process right from the start," says John T. Rougeou, president of Equifax Information Services North America.--Inman News Features

Walt Albro is a former senior editor for REALTOR® Magazine.

Christina Hoffmann
Content Manager

Christina Hoffmann is the content manager for consumer homeownership, buying, and selling site HouseLogic.com, which is produced by NAR.

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