Colorado home buyers could soon lose some peace of mind. Hidden “fees” and “points” could resurface in mortgages next year, if federal legislation is approved. The Mortgage Choice Act (H.R. 3211/ S. 1577) would lift the 3 percent limit on fees scheduled to go into effect in January, a limit that was instated because uncontrolled fees were part of the reason for the housing crisis.
According to Corrine Fowler, Economic Justice Director at the Colorado Progressive Coalition, big banks are desperate to get back to their old tricks.
“They want to carve out a giant loophole into the law to hide the fees that would once again allow them to make a killing, by maintaining incentives for mortgage brokers to steer borrowers into risky, expensive loans that they cannot understand or afford,” Fowler charged.
Fowler is joined by local homeowners and consumer groups in asking Colorado Congressman Ed Perlmutter to oppose the Mortgage Choice Act.
The economic recovery has been slow for Colorado, and Fowler reminded us that billions in taxpayer money were used to rescue banks during the housing meltdown – and the “fixes” to protect consumers need to stay in place.
“But now that they have been bailed out and are back to making huge profits, the big banks want to be free to go back to exactly what they were doing before: gaming the system and hiding the money,” she declared.
During the housing meltdown, the tricks and traps that were allowed encouraged lenders and their associates to steer borrowers into risky and questionable loans, without regard to the borrower’s ability to repay or even qualify for the loan amount.