June 4, 2011
I am commenting on the part of the "QRM" or Risk Rentention Rules that your organisation is discussing.
If--we future homeowners are required to put down a percentage, then the banking industry should also match that percentage equally in retaining the risk of utilizing the loan and its foundational support for the consumer via funding. Most lenders--if any would not want to participate or support this rule. Which should enable a red flag in someones portforlio to go off. At least someone on your committe would recognize this.
I want someone in your committee to understand my personal opinion. I put up the necessary percentage when I purchased my home. The bank kept my money and more (mortgage payments) until I had to short sale. I played by the rules. I was not eligable for any of the Government bailout programs because I was in an Investor only owned note. The banks did not bail me out nor did they want to assist me. I lost my home unwantingly. When I short sold my home, it sold for less than half of what I purchased it for. How does that make one feel. Like the American Dream being ripped from my hands and my heart. While I feel strongly that the banking industry should pay for what its done, I also feel that your committe should do what is right for the American people and the dream of owning a home. We are the ones supporting the banking industry. Not the other way around.
If the banks are required to retain 5% of the note value, then the homeowner who purchased the home should only be asked to put down 5% and no more.
Along with this rule making and risk retention aspect should a new rule be implemented for the escrow holdings and instructions. If the lender/bank decides NOT to loan or assist the buyer with funding, then the lender/bank should supply the escrow funds with interest back to the purchaser and NOT keep the funds. (Part of the Risk for not attempting to find the best deal and loan for the consumer)
As it is now--and do not let anyone tell this committe different--the bank gets to keep the escrow funds with exceptions that are hard to document.
While I understand that these rules need to be in place, the banking industry continues will continue to hold customers who deposit funds as hostages with new fees.
I understand Risk Retention. The banking industry controled the Senate when the bankruptcy provision was being discussed and debated on the hill. The banks do NOT want to be forced into any actions that may jepordize their fundings. Please hold the proverbial stick to the donkey. We consumers need this, just like the banks need us...
So to recap...
Banks should retain the exact same amount of percentage that customers are required to deposit into Escrow accounts to purchase a home. I prefer the method of 5%--more buyers may be able to get a home with this amount. And those funds should be refunded if the bank or lender, resinds any funding for the purchase of the home with no exceptions.
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