Mortgage Mess...why is this never mentioned?

I know there is at least one thread going regarding the mortgage mess in our country, but I wanted to approach this from a slightly different angle. Before I ask the question I will give you a little background on me.

I am the Vice-President of Secondary Markets for a Mortgage Banker. This means I sell our loans on the secondary market to other investors after we originate and fund the loans. I have responsibility to oversee the underwriting department of our company as well. Our company did not ever originate the Option Payment Adjustable Rate Mortgages that led to so many foreclosures because we didn't feel it was the right thing to do. We also originated virtually none of the so-called "liar's loans", which are loans with no income or asset documentation. While these exotic products may benefit a few savvy consumers who understand them and their potential negatives, we felt the risk was too great. As a Mortgage Banker we risk a buy back of any non-performing loan, so we did full underwriting with easy to understand basic mortgage products. This may be why we are still highly profitable while so many companies have folded. I only bring up my background so you know I am not some disgruntled person in the mortgage field who has been harmed in any way by this mess. If anything, our company has benefited from the loss of competition as company after company has closed their doors.

Now on to the reason for my post. You hear all kinds of blame regarding the mortgage companies for offering loan products that were highly risky and certainly there is a lot of blame there, no doubt. You also hear of blame placed on the investors in the Mortgage Backed Securities (MBS) markets for creating a demand for these mortgages, and again no doubt about it some blame goes there also. We hear tales of unscrupulous mortgage brokers and loan officers who took advantage of people, misrepresented the products, mis-stated facts on loan applications, and were just generally unethical. Certainly a part of the blame goes there as well. (I will say that honest loan officers and brokers who originated the loans in accordance with guidelines, completely explained all aspects and risks of the loans to their borrowers, and conducted themselves professionally throughout the entire process did nothing wrong in my opinion if they determined through their analysis the borrower was suited for the type of loan program they offered. You can't blame them the product was available...you can blame them if they were unethical of course.) Believe it or not there are still honest people out there who do everything they can to help people realize their dreams of home ownership and are completely ethical and professional in every aspect.

Of course we'd be remiss not place the majority of the blame on the consumer. Now I know some of you will disagree with this but I feel that we, as consumers and as adults competent to enter into contracts, take responsibility for our actions. In society it seems there are groups who want someone else to take away our responsibilities for our actions and look to place blame everywhere but with us, the ones who made the choices to begin with. I have seen people go to the closing table and sign documents without ever reading anything. In fact, I doubt very many people read much of the enormous stack of documents you are required to sign at a real estate closing regardless of their education level. If anything, most people check the loan terms, payment amount, interest rate, and the amount they have to bring (or are getting back). About anything else goes unread or barely scanned. It is a real shame when people spend more time reading the owner's manual of a new iPod or Playstation or some other gadget than they spend reading the documents related to the largest purchase most people will ever make in their lives.

(It appears I am long-winded so I will continue in the next post since I'm running out of characters.)

To continue my thoughts, I just simply don't buy that they didn't understand what they were signing. If you are competent to enter into any legal agreement you should be able to read the documents presented to you in a real estate finance transaction and understand them. If you don't, you should ask for help...there are many groups out there to counsel first time home buyers and some programs even require the buyer undergo this counseling prior to buying a home.

You can also try to place blame on the general economy, including the policies of any administration you feel may be at fault. I am not going to argue those points either way.

My question is this: Why is none of the blame (at least anywhere I look) placed on the attorney or title agent who conducted the closing?

In a real estate closing the attorney represents the buyer (or the person refinancing). They do not represent the mortgage company. Many consumers don't know that (again, ignorance is not an excuse). I know that builders offer incentives to lower or pay closing costs, etc. if you use their "preferred attorney". They are "preferred" for a reason, folks. It is an assembly line mentality to get them in and get them out. They do not go over the details of the transaction or advise the borrower when something should send up a red flag. They just want paid and move on to the next transaction.

Now this of course does not apply to all attorneys since there are good ones out there also...but I have only had a few occasions where an attorney would call on behalf of the client during a closing to question something (and most likely it was due to the borrower having a question rather than the attorney dissecting the numbers).

However if at a closing the attorney saw that the payment could double or even triple over the next few years or negative equity was building if the minimum payment was made, as was the case in the Pay Option ARMS I mentioned, should they not address that? Sure they can not override the borrower, but how many borrowers were lucky enough to have an attorney who even pointed that out to them to allow them to re-think the transaction?

I don't dislike attorneys, in fact, one of my best friends is a great real estate attorney who does read the docs and advise his clients. But I just wonder why no one ever even mentions the attorneys who were supposed to be looking out for their client's best interests when talking about who to blame.

There is enough blame to go around, and as I've mentioned rightly so. I just wonder with many politicians having a legal background, are special interests at work to protect the attorney's image in all this mess? I wonder...of all of you who've closed on a purchase or refinance...did you know the attorney represented you and not the lender? It's a shame so many do not know such basic things when relating to the biggest obligation financially they will likely ever make.

Originally posted by Coach Knight


There is enough blame to go around...

I just wonder with many politicians having a legal background, are special interests at work to protect the attorney's image in all this mess?
I wonder...of all of you who've closed on a purchase or refinance...did you know the attorney represented you and not the lender? It's a shame so many do not know such basic things when relating to the biggest obligation financially they will likely ever make.

my impressions are that the many who got stuck into the creative & predatory mortgages were buying a house completely on a fantasy idea that they were playing the system... getting keys to a overpriced house knowing they had the sole intention of 'flipping' or re-financing when they were on a firmer financial ground.

Now when the debt bites them on the behind, they whine & feign victimhood...

the well heeled and diligent (be they rich or less rich) took care to get familiarized with the mortgage nuts & bolts...
the folks playing-the-system, could have cared less, any low cost 'closing fee' facilitator would do, be it the builders in-house 'closer' or the all too numberous production-mill house-closing specialists.


The less questions or inquiring minds the better, just so the loan got through and the poor-man speculator grabbed what they thought was a piece-of-the-pie.



everyone was in on the scandles/swindles revolving on the housing bubble, the appraisers, the tax assessors, the builders, the originators, the Rent-A-senters, the list goes on and on.....

s far as a Lawyer conspiracy, the lawyer clique', many in politics as you say, aren't going to 'pick at the scab' which pointing out deficiencies by house closing Attorneys would be doing.
...it is best to sidestep the issue, and quietly revamp the rules/conduct of the lending & mortgage industry.

[edit on 6-4-2008 by St Udio]

Good post. Thanks for bringing the issue up specifically (though it has been discussed in many threads here and there within the context of other topics) and with your personal informed perspective.

I have a question for you.

Let's say I'm educated and can read and understand all of the documents, materials and contracts related to a real estate transaction and that I understand all of their legalese and their effects under all of the contingencies they cover.

Now let's say I disagree with a certain clause as being biased against me in favour of the bank or lending institution (and I really really want the house and I can afford it).

What are my chances of getting the bank (or rather the person I'm dealing with) to change that clause to something more favourable to my concerns?

Seriously.
.

Originally posted by Gools

I have a question for you.


What are my chances of getting the bank (or rather the person I'm dealing with) to change that clause to something more favourable to my concerns?

Seriously.
.

Hi Gools,

I am not an attorney, so I cannot speak from a legal standpoint, only from my experience from the lender's side of it.

Much of the documentation required at a real estate closing is Government-required disclosures as you're probably well-aware. No changing these, of course.

But it sounds like you're talking more about the terms that would be in your actual note & mortgage. So I'll try to address that side the best I can. Anyone with more knowledge is more than welcome to provide insight as well.

Most loans are sold, sometimes many times, on the secondary mortgage market, which is what I actually do for our company. This is true even if a local bank or credit union originates the loan. Some depository institutions like those do hold loans in their portfolio (hence the term portfolio lender) but usually they still want them to be salable on the secondary market in case they decide (or need) to sell them in the future.

For a secondary market investor to buy a loan, it would normally need to meet conforming guidelines...and changing the standard terms in a note or mortgage could be grounds for the loan to no longer meet that criteria, making it hard or impossible to sell. If this is the case, it is doubtful a lender, particularly one who wishes to be able to sell the loan in the future, would allow any alterations to standard conforming criteria.

Freddie Mac and Fannie Mae conforming guidelines will dictate what most lenders will allow when originating loans because if they fail to meet these guidelines the loan is honestly not marketable...and liquidity and the ability to sell that loan is vital to most all lenders.

If you are referencing the payment structure (such as when the loan resets, it's caps, etc., like for an adjustable rate mortgage), those also must meet certain criteria to make the loan attractive to investors. Most states are taking steps to reduce or eliminate loans with prepayment penalties and other features that are not consumer friendly.

So the short answer is I doubt seriously they would change individual clauses since they are so regulated or required by investors. Keep in mind it is their money (the lenders) so they dictate the terms of the loan. Those who feel they don't like the terms can always pay cash for their home.


That's a great question, by the way!

Just my 2 cents (adjust accordingly for inflation)... I didn't get screwed per say on my loan, however I did get screwed by my realtor. And here is how I get there (jezus, shades of Glenn Beck?)...

Rather simply really. As a first time home buyer, I enlisted a realtor to make sure I didn't screw myself by taking on too much of a monthly payment... and to not get screwed by the seller. My realtor was concerned with neither. His concern was to put me in a house that was at the very limit of what I could possibly afford.

When I gave the initial down payment, his figure for a mortgage was around something I could afford. Now... as a first time buyer and enlisting the aid of a realtor for guidance, he most certainly should have mad me aware or figured in the additional costs of property/school taxes (I have no kids by the way... what a crock)... nor any required extra insurance with a PHFA loan. All this figured in is something I cannot afford AND be able to take care up maintenance and upkeep and other surprise expenses. He damn well knew that.

I contend that the worthless realtors are as much to blame for this whole mortgage fiasco as anyone else. Just another group of leeches... lump 'em in with the lawyers and politicians... that's where they belong.

reply to post by RabbitChaser



RabbitChaser,

I can understand your situation, as many first time home buyers do not know that there will be property taxes and insurance escrowed into their payment and how much more that will make their payment.

In theory, the realtor should have had you working with a lender also, since most sellers want to know that you have pre-qualified for a loan before you put an offer on a home. Many realtors have an in-house lender or broker they recommend, and of course they want to make sure that loan closes. If the loan closes the realtor gets their commission even if you never make a payment. The in-house broker also gets paid at closing with no charge back if the loan goes bad. If their in-house is an actual lender then they have to underwrite a little better to make sure you make a certain number of payments (usually 4 to 6) so they don't have to buy back if you fail to pay.

Greed caused a lot of the mess for sure. Realtors getting 6 percent or whatever they can on a home for some reason doesn't get as much negative press as lenders who get a percent or two. As I mentioned, there is a lot of blame we can all place...realtors can also be added to the list that I missed. The more house you buy the bigger their commission without any concern for if you can keep it. Heck if you lose it, they may get to sell it again! And yes, I know there are a lot of honest realtors out there also, so I am not type-casting them all.

If you made an earnest money deposit normally your contract gives you an out if you cannot qualify for the loan, and if the taxes and insurance put you over what you can qualify for, you may be able to get out of the deal and get all your money back.

Good luck!

Edited to add: I can't send U2U messages until I have 20 posts but I got your message...thanks!

[edit on 6-4-2008 by Coach Knight]

Golly, the bankers blame the lawyers, the lawyers represent who pays them, the sellers are just that - evil sellers, and the buyers are all victims.....

I'm a non-home owning American who apparently is going to bail all your stupid ass*s out with my tax dollars.

When do I get a free home I can't afford to pay for after putting nothing down on it. I want someone to just give me a house....

I wonder if part of the sweeping law cleaning this mess up also contains a provision that everyone involved is a bad credit risk and not available for future loans. Has anyone even thought about this....

How do you feel about lenders having to disclose how much (not just the percentage) they are making on the back end of a loan?

I recently had a couple of employees who were mortgage broker refugees. They illuminated me a bit on how the brokers made money on both the front and back of the loan. I have a general understanding of it but couldn't begin to explain it here.

When I bought my house in '05 i wasn't aware that the closing Attorney worked for me, but I do have pre-paid legal insurance and had had them go over it before I signed. I used a reputable lender (a synovus affiliate). I'm a vet so I got a VA secured loan. We bought a house just slightly over 50% of of what we qualified for. We know bad stuff happens and didn't want to get in over our head. I didn't have a large downpayment but our DTI and income were fine. I refused to use an agent and bought directly from the owner.

There is plenty of blame to go around. Start with CONgress who bipartisanly gutted Depression era laws that separated commercial and investment banks. Move on to the FED which kept rates artificially low for too long. Move on to the finance industry who in the name of innovation created an alphabet soup of products that few if anyone understands. Then move to your industry who often pushed exotic loan products to people who could have qualified for a traditional 15, 30, or 5/1 ARM (not a bad product for the type of person it's made for). Mix in a homebuilding industry that continued to add supply even after the market was saturated. Spread it around some bubble areas where home values were far beyond the traditional 3-5xs annual income. Bring on the speculators who wanna be the next Trump further driving up prices. Have the political class and the media drum it into average joe that the only way to the American dream is home ownership. Meanwhile have CONgress pass a Bankruptcy law that makes it easier (in a non-recourse state) to mail the keys back to the bank on a mortgage than to discharge credit card debt. At the same time throw in no real growth in income (inflation adjusted) to the majority of Americans for oh about 20yrs now. Then have it all explode into the normal end of a business cycle, weakening dollar, loss of manufacturing base, and apparently endless war. Oh and lets not forget making models that assume that property values never go down. Wa-la we've got a recipe for an economic disaster.

The price of housing needs to come back to the historical trend line. Until that happens any CONgressional or FED action is only postponing the inevitable.

reply to post by hinky


Hi Hinky,

Thanks for reading my long-winded post and taking time to reply.

I just want to make clear I wasn't blaming attorney's specifically...I stated everyone involved in the process has some amount of responsibility. This being a conspiracy forum I just wanted to throw out the thought of why attorneys seem immune from the criticism.

Zero down programs are almost all gone now, and it's a good thing in my opinion. If you don't have any savings how will you take care of the responsibilities that go with home ownership? (Not meaning you specifically, but just people in general).

While our current credit scoring model is very flawed, one thing is very sure...if you did get behind or foreclose on a home you had no business buying...you ARE a bad credit risk. We don't need a law to know that.

And for what it's worth...I don't think the government should be bailing out anyone in this. It's amazing how well free enterprise works when left alone.

By the way, best wishes on eventually getting a home of your own if that's what you choose to do. In some cases, renting is a great alternative to actually owning.

reply to post by jefwane


That was well said, jefwane.

To answer your question, what you are referring to is YSP (Yield Spread Premium). In simple terms this is the amount that a broker earns from a lender for originating a loan. The lender has a "par" rate...for example, you may be able to get a loan at 5.50% interest and that is the par rate which is 100. If the broker puts you in that rate, he only makes any origination fees he charges, there is no YSP to pay. If you take a higher rate than the par rate, say you take 5.75% and it is 101, that means your broker gets the extra 1% of the loan amount paid in a YSP. If you take a rate lower than the par rate, you'd pay discount points to compensate for buying the rate down. So for example, you may be able to get 5.25% for one point (1%). Of course the numbers aren't this exact, I'm just giving some examples here.

Most people say the lender pays it not the borrower, however the borrower does pay by having a higher payment than if they had the par rate. Now of course no one works for free, so there is nothing wrong with charging a rate above par. However, on a lot of these exotic loan products and sub-prime loans, the brokers made a killing on them in YSP that was not disclosed because they charged people a lot higher rate than they qualified for. It seems when people get starry-eyed about home ownership, they don't take time to evaluate the numbers, they just hear "we'll do the loan for you".

I am completely in favor of disclosure of YSP to the consumer.

This disclosure is for brokers, not the lenders, of course. A Mortgage Banker like I work for doesn't know how much we are making on a loan until we sell it, so we can't count any revenue until we have sold the loan. It is possible we actually lose money on a loan (yes, it happens) until we sell it if market conditions make the loan's interest rate undesirable. We also have the right to retain and service the loan like a brick and mortar bank has, so we have no YSP to disclose.

I forgot to mention have all this happen in a culture that places almost no value on personal responsibillity.

Ultimately the .gov is to blame for not regulating anything. I hope no banks or citizens get bailed out...I'd prefer to see a mad max scenario where eventually (decades from now) the markets could return with faithful investors.

There is something that everyone needs to understand. The goverment is not "giving' money to anyone. All "bailouts" to date have been in the form of loans, backed by most recently, illiquid mortgage related assets. If the goverments efforts work then these securities will regain most if not all their value. When this happens the Fed gets back their money + interest, plus they get a large share of any profits these securities end up generating.

I am in favor giving help to the citizens and these loans to the banks/brokers. When a homeowner gets foreclosed, the bank now owns the home. Banks are not in the business of owning homes, so they choose to sell at whatever price the market will bring. Add in the costs involved, and the banks end up getting only about 85-90% of the firesale valuation. If the homeowner could afford payments based on fair market value, wouldn't it be beter to reduce the mortgage to that point, rather than take the huge loss on the foreclosure sale? Or why not give them interest only until the market has time to recover or finances to improve. Would anyone be better off if the banks were forced to take all these losses and end up going bust, while more and more people end up in the streets? I just don't see how that helps anyone.

If I owe you 5 birds and only have 3 and no prospect of getting for a while, are you better taking a promise for 4 which has a high percentage of being good or refuse to settle when it is clear this course of action will only get you 2. (I do have to eat tonight)

The Fed actions have been positive to me. A little give by the banks will allow this situation to resolve itself in a few years and everyone will be the better for it. The fed will be paid back with profits, the banks will have a steady base of performing mortgages and the folks who couldn't afford the house will have a chance to improve their financials or at least not being forced to sell while this panic abounds. And the banks limit their losses so that they will be willing to lend to all of you when you can afford a home.

I think a lot of the problems are a combination of a few things. First and mainly are the mortgage companies that falsifed appraisals not to mention peoples general lack of understanding and readng the fine print of mortgage products that don't make any financial sense. My wife is also in the mortgage industry she is a risk analyst and analyses loans to make sure they are closed properly. I cant tell you how many times she has come home fuming about phony documentation that mortgage brokers were providing the bank to help the borrower get approved. Were talking fake income statements and doctored w2's. Additionally how do you feel about the appraisal companies overinflating home values to get mortgage products to work. Do some research into washington mutual and the current law suits involving their appraisal company.

Yes the consumers are to blame but so are the unscrupulous banks that care only about meeting their goals.

Originally posted by Coach Knight
To continue my thoughts, I just simply don't buy that they didn't understand what they were signing. If you are competent to enter into any legal agreement you should be able to read the documents presented to you in a real estate finance transaction and understand them. If you don't, you should ask for help...there are many groups out there to counsel first time home buyers and some programs even require the buyer undergo this counseling prior to buying a home.

You can also try to place blame on the general economy, including the policies of any administration you feel may be at fault. I am not going to argue those points either way.

My question is this: Why is none of the blame (at least anywhere I look) placed on the attorney or title agent who conducted the closing?

In a real estate closing the attorney represents the buyer (or the person refinancing). They do not represent the mortgage company. Many consumers don't know that (again, ignorance is not an excuse). I know that builders offer incentives to lower or pay closing costs, etc. if you use their "preferred attorney". They are "preferred" for a reason, folks. It is an assembly line mentality to get them in and get them out. They do not go over the details of the transaction or advise the borrower when something should send up a red flag. They just want paid and move on to the next transaction.

Now this of course does not apply to all attorneys since there are good ones out there also...but I have only had a few occasions where an attorney would call on behalf of the client during a closing to question something (and most likely it was due to the borrower having a question rather than the attorney dissecting the numbers).

However if at a closing the attorney saw that the payment could double or even triple over the next few years or negative equity was building if the minimum payment was made, as was the case in the Pay Option ARMS I mentioned, should they not address that? Sure they can not override the borrower, but how many borrowers were lucky enough to have an attorney who even pointed that out to them to allow them to re-think the transaction?

I don't dislike attorneys, in fact, one of my best friends is a great real estate attorney who does read the docs and advise his clients. But I just wonder why no one ever even mentions the attorneys who were supposed to be looking out for their client's best interests when talking about who to blame.

There is enough blame to go around, and as I've mentioned rightly so. I just wonder with many politicians having a legal background, are special interests at work to protect the attorney's image in all this mess? I wonder...of all of you who've closed on a purchase or refinance...did you know the attorney represented you and not the lender? It's a shame so many do not know such basic things when relating to the biggest obligation financially they will likely ever make.

reply to post by jefwane

Hope this helps..I was there.........

At the time I was in Houston owning a home....
The Gov made the loan Companys give those poor folks a chance to own a home.

They had tracts of homes some were $450 K that you could buy, I told my wife those are easy to get in, no down, no credit check, no job check just sign for a low payment of $150 for X years then after X years you had a jump in the payment to $4500 a mo or more. But by that time you would have a job that could handle it. My wife said do not get one as when the jump happens what will you do ?

We did no do it.

The Gov made them give the no check loans and the hot shot sales people were closing on commision. So you no how easy it was they even did all the paper work.

Everyone who got one new full well it was going to jump to $4500 everyone new it. People got the homes for the low cost ride with no intention of staying just move on after the jump as we do not have any credit anyway so we will live the good life for X years.

This is all fact the way it was and how it went down. No one should get any bail out.


I had an investor friend big time when the bottom fell out of basic development, he had built some of this stuff to sell. He killede his self.

Thats how it was.......

Thanks

There is a lot to read here, so ill keep it short, since you said that your company did not sell the exotic loans because of ethics, that must mean there was something wrong with selling that product to normal consumers in the first place, I think there is blame to be passed to the consumers but lets be honest, wall street and other speculators were no more better than the people that the loans were made to.

I just think that when they came up with these products the analysts and financial gurus had to have known the amount of risk up front, I think that they already knew making loans was a hard business, and since most people dont have what it takes downpayment and credit wise to get financed that meant that a lot of banks in that business could not succeed in the first place, so they were willing to take that risk but by using the law of numbers and averages they calculated that even though a great deal of the people would default, a great deal would not and bite the bullet and still pay their mortgage which if you look at the numbers there are lot of the subprime consumers that have continued to pay their mortgage an not default despite a lot of the propagated numbers who did.

I think that the gurus that packaged these loans into securities are the main parties to blame for the debacle, they were the saavy same people that 20 years ago would turn down most applicants based on principles and ethics but greed drove this whole wagon.

People that took the loans out do have some responsibility but those that sit at the table that can say yea or nay in the first place and the underwriters are the main culprits in this scam.

Investment banks like bear and some of the other banks bought these junk securities knowing full well in advance what backed them, they just wanted to get any money they could take and invest it and gain bigger profits, its all greed driven, don't let the bankers fool you, they knew the risk from the beginning to the situation we find ourselves in today.

Originally posted by Coach Knight

My question is this: Why is none of the blame (at least anywhere I look) placed on the attorney or title agent who conducted the closing?

In a real estate closing the attorney represents the buyer (or the person refinancing). They do not represent the mortgage company. Many consumers don't know that (again, ignorance is not an excuse). I know that builders offer incentives to lower or pay closing costs, etc. if you use their "preferred attorney". They are "preferred" for a reason, folks. It is an assembly line mentality to get them in and get them out. They do not go over the details of the transaction or advise the borrower when something should send up a red flag. They just want paid and move on to the next transaction.

Wrong.

The settlement attorney or closing agent represents nobody.
They represent the sales contract.

Builders offer incentives if you use their choice of closing agent because of convenience and peace of mind.

Closing attorneys receive commissions up to 70% of the title insurance premiums paid by the borrower.

Kickbacks are illegal...but I'm not naive to think they don't happen in one form or another.

Maryland, a consumer friendly State, mandates that loan documents are uniform. No prepayment penalties...at least prior to interstate banking came along.

During the recent boom, should one buyer start to read or pour over the documents, the attorney would stop the closing, offer to make copies of everything...and reschedule the closing...because the waiting room would be backed up the rest of the day.

The only REAL important docs in a closing are the deed, deed of trust, and promissory note. Everything else is BS.

reply to post by DCPatriot


Perhaps there are a few states where the attorney does not represent the borrower, but all the states we originate in (and that's quite a lot) all require the attorney to represent the borrower. Here is just a quick quote from one SC attorney's website (I don't know that we've ever used this guy by the way so don't think this is an endorsement, it is not...I found it with a google search):

Q. Can I, as the buyer, select the attorney of my choice for my closing? (Return to Top) A. Generally, yes, unless the sales contract specifically states otherwise. Some relocation companies require that certain attorneys perform closings when the relocation company is the seller. This requirement is usually made because it will facilitate the closing and make it go more smoothly. This does not mean that the closing attorney does not represent you; he is still your attorney, and represents you as much as he represents the seller. Some lenders and realtors recommend a certain attorney; their recommendation is certainly worth considering, but you are not obligated to use the attorneys they recommend. Sometimes, a buyer finds out later (around closing time) that someone has already hired the lawyer for him, without telling him or making this clear, so be sure to speak up early in the process and communicate with everyone in the "loop." Otherwise, sometime around closing time, it turns out two separate lawyers have been hired, and each is preparing to do the closing!

External Link: External Link

As noted, the attorney can also represent the seller and mortgage company from the standpoint that they are required to make sure all documents are completed and recorded, and funds disbursed as instructed. However, they always represent the buyer (borrower).

Another quote from another attorney:

Who does the attorney represent? The attorney represents the buyer.

External Link: External Link

There are lots of documents that people sign at a closing, but many are very beneficial and do provide full disclosure. To state a Truth in Lending document or a Good Faith Estimate is BS is a little extreme.





[edit on 7-4-2008 by Coach Knight]