Congress is set to pass a bill that blocks mortgage financing companies from sharing with consumers information on the best interest rates available.
This sounds crazy and it is.
We all know that housing has become extremely expensive over the last five years. A key reason for this is the very high interest rates new homeowners have to pay. Most homeowners in middle America have a mortgage while the wealthy generally do not.
Now Congress wants to go out of its way to make sure the middle class is paying possibly the highest interest rates because they don’t want them to have other options.
It is a known fact that wholesale mortgage providers will save an average homeowner $10,300 on average.
Veterans will save even more if they go wholesale, somewhere around $13,400.
But Congress wants to make sure that they limit rate information mortgage providers can offer to potential homeowners about how they can save money.
Currently there is a bill in the Senate right now designed to do just this.
For 20 years, mortgage wholesalers have been able to buy information on potential customers, This data comes from credit report companies who have to provide their reports to banks and others.
This data has enabled the wholesale mortgage brokers to provide information to homebuyers of competitive rates.
Getting competitive rates saves consumers money.
The buyer is in a better position as they can either negotiate a lower rate with the bank or go with a different lender.
Because of this competition it also prevents certain organizations from having a virtual monopoly to charge whatever they want.
Some in Congress want this bill, claiming they are giving consumers privacy.
This is complete hogwash because the consumer is currently protected, they can opt out if they do not want their information released, or they can be put on a do not call list.
The only thing this current bill does is protect the big banks and financing firms that they can continue to punish the middle class with high interest rates.
We have two organizations that support this so-called privacy bill: the Mortgage Bankers Association and the National Association of Mortgage Brokers.
They hate the wholesale brokers that come in there and give a fair price for the mortgage.
These associations have been lobbying for years to stop consumer homebuying information that is shared with wholesalers.
This competition causes the larger banks to have to reduce their price and prevents them from charging as much as possible for the loan.
It is interesting to note that this entire group of small wholesale brokers cater to the middle class because the jumbo loans are almost exclusively handled by the Banks or large institutions.
The escalating cost of housing, fueled by high interest rates, unfairly burdens the middle class while enriching large financial institutions.
The current legislation in Congress, disguised as consumer protection, aims to actually limit consumers’ access to vital information that could save them many thousands of dollars.
It’s time to ensure a fair housing and competitive mortgage market that serves all Americans.
Perry Johnson is an American businessman, author and former presidential candidate.