Your Florida Mortgage Broker: Make Sure He or She Doesn’t Mislead You

It’s imperative, when you enlist a Florida mortgage broker for help in your home loan search, that you trust him or her absolutely. At Florida Home Loan, we pride ourselves on integrity, experience and trust. But as the Miami Herald story below notes, not all brokers are what they bill themselves to be.

Cynthia Cariseo trusted her Florida mortgage broker to find her a suitable home loan. But after a few months of making very low monthly payments, she looked closely at her statement and realized something was wrong.

“Instead of owing $202,000, I owed $206,000,” said Cariseo, 60.

Cariseo learned she was stuck in an adjustable rate mortgage with a teaser rate that added more to her principal balance each month. Plus, the loan had a hefty Florida mortgage refinance penalty.

“I was totally misinformed,” Cariseo said, “I would have never taken that kind of mortgage out. I’m not stupid.”

Such stories are all too commonplace. And disturbing.

Lawmakers in Tallahassee are considering several bills this session to prevent similar misunderstandings and Florida mortgage broker malpractice, as home foreclosures increase statewide.

The measures would require a Florida mortgage broker to more fully disclose the risks associated with adjustable rate mortgages.

As you may know, these rates sound too good to be true, and often bring a shock to homeowners when monthly payments unexpectedly rise.

Part of this would be accomplished by supplying the Florida mortgage borrower with a pamphlet on the features and risks of such loans.

It also would require mortgage brokers to alert a prospective borrower when the loan terms originally quoted change within three days, or three days before closing.

Mortgage brokers, who match borrowers with mortgage lenders, originate more than 70 percent of U.S. home loans yet often are not subject to the same rules and regulations as traditional banks and other lenders.

The Office of Financial Regulation initiated legislation after receiving numerous complaints from borrowers about dubious dealings. Many have complained of their mortgages being switched at closing.

If the bill passes, brokers will be required to tell borrowers in advance how much they expect to earn from the Florida mortgage lender.

Some consumer advocates said the measure is too little, too late for the thousands of adjustable-rate mortgage holders like Cariseo and provides little real protection against the lending abuses responsible for today’s homeowner troubles.

“Should disclosures be in more plain English and more timely, of course they should, but they aren’t going to get to the real problem,” said Uriah King of the Center For Responsible Lending.

Federal disclosure requirements did little to keep people out of bad loans, nor will state disclosure requirements of mortgage brokers, King said.

Continue reading in the Miami Herald …