Bookmark this:
Create a Homeowner Obligation Made Explicit (HOME) score for mortgage comparisons
"Will create a Homeowner Obligation Made Explicit (HOME) score, which will provide potential borrowers with a simplified, standardized borrower metric (similar to APR) for home mortgages. The HOME score will allow Americans to easily compare various mortgage products and understand the full cost of the loan. The HOME score would also help borrowers understand their long-term obligations and would be required to include mandatory taxes and insurance."
Sources:
Subjects: Housing, Market Regulation, Transparency
House passes bill to standardize mortgage information
Updated: Monday, January 11th, 2010 | By Angie Drobnic Holan
President Obama promised to create new regulations so that people could more easily understand and compare mortgages when it comes time to buy a home.
Legislation pending in Congress would come very close to accomplishing Obama's goal.
A bill approved by the House of Representatives calls for standardized disclosure of the terms of the loan and requires the U.S. Department of Housing and Urban Development and the Federal Reserve to develop regulations for such disclosures.
Lenders would be required to disclose the following in a standardized manner: the principal amount of the loan; the term of the loan; whether the loan is fixed or adjustable; the annual percentage rate of interest at the time of the disclosure; whether the loan can adjust after the disclosure; when an adjustment would or could occur; the maximum annual percentage rate of interest for adjustable loans; the total monthly payment under the loan; the maximum total estimated monthly payment in case of adjustment; the total settlement charges in connection with the loan and the amount of any down payment and cash required at settlement; and whether or not the loan has a prepayment penalty or balloon payment and the terms, timing, and amount of any such penalty or payment.
The bill does not directly require lenders to follow new disclosure rules. Instead, the proposal says that "the Secretary of Housing and Urban Development and the Board of Governors of the Federal Reserve System shall include regulations for the mandatory use of standardized disclosure forms if they jointly determine that it would substantially benefit the consumer."
Finally, the Senate still needs to approve this provision, so it's possible the proposal could change.
Still, the House bill is enough for us to rate this promise In the Works.
Sources:Thomas, HR 1728, accessed Jan. 11, 2010
We want to hear your suggestions and comments. For tips or comments on our campaign promise database, please e-mail the Obameter. If you are commenting on a specific promise, please include the promise number. For comments about our Truth-O-Meter or Flip-O-Meter items, please e-mail the Truth-O-Meter. We’re especially interested in seeing any chain e-mails you receive that you would like us to check out. If you send us a comment, we'll assume you don't mind us publishing it unless you tell us otherwise.
Keep up to date with Politifact:
- Sign up for our e-mail (about once a week)
- Put a free PolitiFact widget on your blog or Web page
- Subscribe to our RSS feeds
- Follow us on Twitter
- Fan us on Facebook
