For the first time ever, U.S. homebuyers will have free and private access to unbiased information right down to their local ZIP code level about average mortgage loan prices, including interest rates and closing costs. The new tool available at FairLoanCertification.com is part of the ongoing campaign by the non-profit Fair Mortgage Collaborative (FMC) to promote "fair and safe mortgages" in the wake of the twin crises in predatory lending and mortgage foreclosures.
The new FMC resource, entitled "Fair Mortgage Cost Check" is a one-of-a-kind tool that will allow homebuyers to quickly and privately determine if mortgage pricing--including interest rates and closing costs--is significantly out of line with the local marketplace. A consumer who has an offer from a mortgage lender can go to the site and use the tool to compare what he or she is being offered with average local rates and quotes. The "Fair Mortgage Cost Check" encourages consumers to go beyond just looking at interest rates to the fees that can be inflated and needlessly cost thousands of extra dollars.
Howard Banker, executive director, Fair Mortgage Collaborative, said, "We hope that consumers will use this highly localized information for home mortgage decision making in the same way that they use GPS or MapQuest to plan a trip. Responsible lenders will have nothing to fear from empowering consumers with more and better information. However, this is decidedly bad news for the new generation of predatory lenders who are abusing consumers in the pricing of mortgages, including the interest rate and closing costs. The Fair Mortgage Collaborative was created to help encourage fair and safe mortgage lending practices and also to help restore homebuyer confidence, which had been shredded by predatory lending abuses and the many horror stories associated with the mortgage foreclosure crisis. We see today's announcement as a major step in that direction."
Jeff Lazerson, president, Mortgage Grader, said, "What keeps mortgage shoppers up at night is an overwhelming sense of confusion, fear and general mistrust of lenders. So much is at risk for consumers if bad decisions are made. And there are so many difficult choices to make, including a daunting loan product menu, even in today's scaled-back mortgage market. What the Fair Mortgage Collaborative is doing today is giving consumers a way to cut through all that confusion and make better and informed decisions."
The new FMC tool maintains real-time loan pricing with all standard risk-based (agency and government) pricing down to the ZIP code level, which goes far beyond what is available from any other service. No other tool of this sort provides ZIP code level specifics and none includes settlement costs, which is an area that is increasingly being exploited by some lenders.
FMC's "Fair Mortgage Cost Check" is not a "prospecting" tool; it respects the privacy of visitors, who are not required to provide personally identifiable information. Further, the FMC resources also completely avoids the bias that is inevitable when a tool of this sort is underwritten or ad-supported on a commercial basis by lenders, who then get clients sent to them. Instead, the "Fair Mortgage Cost Check" resource provides information about FMC-certified lenders to individuals who by using the system to check loan pricing have identified themselves as possibly having excessively high mortgage pricing terms. If they so wish, the homebuyer or homeowner can then contact FMC-certified lending organizations and check for better pricing. However, the Web tool provides no information to any lender or other organization.
Mortgage Grader, under contract Fair Mortgage Collaborative, manages the "Fair Mortgage Cost Check" system. Its proprietary pricing engine is used to keep all closing cost data updated and accurate. Mortgage Grader is a trusted contractor that separately developed a patented mortgage software system that prohibits discrimination in mortgage lending.
American consumers seeking mortgages now have the option of using lenders that are certified as "safe," "fair," and non-predatory by the non-profit Fair Mortgage Collaborative. FMC is committed to providing homeowners and homebuyers with the tools they need to access to fairly-priced, non-predatory mortgages. This major effort, supported by the Ford Foundation, is the first national campaign of its kind aiming to restore consumer confidence in mortgage lending in the wake of the ongoing mortgage foreclosure crisis fueled in large part by predatory lending abuses.
Launched in June 2009, the Fair Mortgage Collaborative certifies that lenders meeting its rigorous "Fair and Safe" Standards, which ban predatory products and practices. Certified lending organizations--such as BECU (Boeing Employees' Credit Union), Prime Alliance Solutions, Direct Lending Family, Federation of Appalachian Housing Enterprises, Inc., and Clearinghouse CDFI-- now operate from coast to coast. FMC's current certified lending organizations provides mortgages currently totaling more than a billion dollars per year. That level is expected to double or more in the first year of the program, with further growth anticipated in out years as the demand for mortgages that are certified as being non-predatory takes hold.
For more information, visit www.fairloancertification.com.