The Foreclosure Report

'Everyone Agrees Disclosure Process Broken'

The Charlotte Observer continues the series on loan reform. "Mortgages and other financial products need to carry clear and simple disclosures so borrowers can make better financial decisions, a federal banking regulator said Thursday. Existing disclosures don't help people understand what they're buying, or compare it with another product, said Julie Williams, chief counsel to the comptroller of the currency."

"She contrasted the failure of financial disclosures with the success of nutritional labeling. 'Shouldn't we all be concerned if I'm getting a more meaningful, comprehensible disclosure when I buy a bag of potato chips than when taking out a mortgage to buy a home?'"

"The Observer reported in January that foreclosure rates in Mecklenburg County quadrupled in recent years because of defaults on unconventional mortgage loans."

"Williams said federal regulators will unveil a study today on improving privacy disclosures on financial forms so that more people will understand their rights. For example, she mentioned lending companies that prominently advertise the introductory interest rate on a loan, but not the fact that the rate will adjust in the second year. A proper disclosure would give equal weight to both pieces of information, she said."

"The financial industry is open to improvements but cautious about the particulars, said Donald Lampe, an attorney who represents various banks. 'Everyone agrees that the disclosure process now is broken,' said Lampe. 'The question is how to fix it.'"

And the Detroit Free Press has an update on defaults in that city. "In Wayne County, the number of potential foreclosures is more than double what it was at last year's deadline for 2002 tax bills. As of Wednesday morning, the most recent count available, 10,284 properties in the county had delinquent 2003 taxes, including 2,237 occupied residences. Of the 10,284 Wayne County properties at risk for foreclosure, 9,185 are in Detroit."

"Real estate agents are increasingly coming across homes in foreclosure, for tax or mortgage reasons. Chris Cotzias, broker in the Pointes, said about 60 of the 630 homes for sale in the Grosse Pointes are in foreclosure. 'In 28 years of doing this, I've never seen it like that,' he said."

posted by Ben Jones @ 8:50 AM