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10-02-07 - Washington Mutual Inc., the sixth largest home mortgage lender in terms of volume in the U.S., is requiring mortgage brokers to provide more information to borrowers in an effort to clean up the origination process.
In addition to providing more information to borrowers, WAMU will be calling every loan originated by mortgage brokers to ensure that the mortgage they are about to take on has been fully explained. This includes making sure the new mortgage holder understands whether or not the interest rate will adjust, pre-payment penalties, any negative amortization, interest rate, loan amount and all the other fine details about the new mortgage.
The move comes as lenders and brokers face pressure from lawmakers and consumer advocacy groups. Critics say poor disclosures have led to many borrowers taking out loans they couldn’t afford and quite frankly did not understand.
“WaMu will not close or fund any loan without signed confirmation from the borrower that the key terms of the loan have been disclosed to the borrower by the broker early in the application process,” said spokeswoman Sara Gaugl.
Washington Mutual sells many of their loans through third party brokers, which industry data showing that 68% of all residential mortgages in the U.S. are generated through mortgage brokers and state licensed lenders. By taking these steps Washington Mutual hopes that their efforts will set a new standard in which mortgage loans are originated.
For more news visit the Minnesota Mortgage News center.
Posted October 2nd, 2007 by jredz
