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Say goodbye to your community bank
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Dear Editor,
Enjoy your community bank while it is in your neighborhood because it won’t be there for long. You think I am kidding? I wish I was but this is news that you won’t even hear from Fox News, at least not just yet.  

On Aug. 13 of this year, the Department of Housing and Urban Development (HUD) enforced a new RESPA (Real Estate Settlement Procedures Act) rule. Let me remind you that HUD is a government agency that was established to protect consumers. I am so thrilled that the government of our country is here to protect me and you. You probably heard that our master politicians spend our tax dollars talking and establishing laws on behalf of the Americans. They have been claiming that the collapse of our economy was the result of the “loan sharks” that went out there and took advantage of the poor people (yeah, like the ones that ACORN was helping). This is a long story but I won’t get into this one right now.  

This new rule established by HUD, in a nutshell, is forcing the entire banking industry to “improve” the disclosures given to borrowers/consumers when they buy a house and apply for a mortgage. In other words, instead of you signing 100 pages during the process of getting a loan you’ll get “educated” and will have to sign 200 pages.  You think you’ll have the time and patience to do that when and if you qualify for a mortgage loan? I have been in the mortgage industry for 18 years and what I heard from the majority of my customers was that they felt overwhelmed with the amount and the complexity of the mortgage documents. For those of you who took out a mortgage loan in the past 5 years, does that appear accurate?

But, now I feel a great deal of relief because the FHA chief, Mr. Dave Stevens, is there to help us again. But wait, this is not over. The entire banking industry has until Jan. 1, 2010, to develop new software, new forms and train their employees. The American Bankers Association (ABA) is practically begging HUD to give banks a few extra months but HUD is not willing to listen.

Many community banks, small and medium sized, are also confused about the HUD’s new rule because this new rule came in the form of a FAQ (frequently asked questions) format and is it surprising that HUD employees are “out to lunch” when the banks call to get more answers to their questions? HUD’s “cookie-cut” answer comes from one of the HUD’s attorneys (paid with our federal tax dollars) stating that the HUD guidance is “informative and instructive” for those who are not familiar with the RESPA rule.

But wait a minute, is this attorney referring to consumers getting guidance? If the banks don’t understand it properly how in the world can the consumer understand it? Does that make sense to you? Let me also mention, before I forget, that HUD has an attorney for just about each regulation. How many attorneys are on HUD’s payroll? I really don’t know but one of these days I will research this piece of information. More on HUD entity in the near future but I’d love to see some sort of audit on this huge government department.

And you thought our government is in bed with the bankers. Well, you are partially correct. They are in bed with the big bankers, such as Bank of America and the other three that we bailed out. Can you now figure out why your small or medium sized community bank is probably going to close its doors in the next year? These banks are too small to compete with the big BOA, Citi or Chase.

By the way, did you know that during the past decade many of these local banks have not changed their lending guidelines to lend money to high-risk borrowers? They did not do what ACORN literally forced many lenders to do, including the Fannie Mae and Freddie Mac approved lenders.

Many of them kept their loan as “portfolio” (in-house) loans. But now, the government is finally getting to them. Not through risky loans but through ambiguous regulation and unrealistic timing. Soon, the competition will cease to exist. A banking monopoly is establishing itself with big banks that are controlled by the government. So, when your banker will start treating you like you’re not important to them and you’ll realize that you cannot go to their competition because that does not exist, you’ll finally figure out how corrupt this government is.

Next year, 2010, is the voting year. Will you please start checking out your representatives and look for those fresh faces with honest records? I say we must change the entire Senate and Congress. Call your current representative and ask if he/she is demanding a Congressional investigation on the corrupt organization ACORN? And don’t just believe what he/she says. Check them out and find out if they “do what they promise.”
Carmen Alexe