The undisclosed cost of trended credit data

 Credit Scoring  Comments Off on The undisclosed cost of trended credit data
Aug 222016
 

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

You may have heard that lenders are going to start using credit reports with “trended data.” Credit bureaus claim it will increase the number of borrowers with excellent credit.

Currently, your credit report is a snapshot in time of your credit usage. The report shows your current account balances, limits, and minimum payments. A trended credit report shows how those amounts have varied over the last two years. Thus, it augments usage with insights into your credit habits. Do you pay off your credit cards each month? Do you pay more than the minimum balance? A trended report will reveal these habits.

What you may not have heard is how trended data reports will effect your closing costs. The credit bureaus are charging more for all the extra data, and that cost gets passed on to you, the loan applicant. It appears the credit report fees you see on your closing statement will jump by about $10.

New mortgage rules cost you money

 Regulations, Residential Mortgage  Comments Off on New mortgage rules cost you money
Nov 262014
 

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

I read an interesting article the other day that claimed that all the new mortgage regulations have saved you money. Feeling richer? What a bunch of bull.

Every honest analysis I’ve read about the effects of the new regulations, and by honest I mean ones that aren’t poorly disguised advertisements like this one I read, shows the regulations have increased costs by 30 to 50 percent. Sure, as the article states, you can get a no-closing-cost mortgage now, but you could do that before the regulations went into effect. And do you really think everyone loves you so much they’re all working for free? All those costs, those higher closing costs, are getting built into your interest rate. I recently read a report that estimated the regulations have added as much as 0.5% to the interest rate of every mortgage. Over the life of a $200,000 loan, that means you’re paying an extra $20k because of the new regulations.

Now, I’m not suggesting we overlook the excesses of the last decade, but I am calling bull**** for what it is. Maybe it’s time we become more careful about the excesses of regulation.