Gm 520 - Administrative Agencies

GM520 -Administrative Agencies Assignment

1. State the administrative agency which controls the regulation. Explain why this agency and your proposed regulation interests you (briefly). Will this proposed regulation affect you or the business in which you are working? If so, how? Submit a copy of the proposed regulation along with your responses to these five questions. The proposed regulation can be submitted as either a separate Word document (.doc) or Adobe file (.pdf). This means you will submit two attachments to the Week 2 Dropbox: (1) a Word doc with the questions and your answers and (2) a copy of the proposed regulation you used for this assignment. (10 points)

I chose the Federal Trade Commission's Mortgage Acts and Practices - Advertising (16 CFR Part 321). They are responsible for monitoring deceptive or unfair practices. This also includes deceptive advertisements of any kind. This interests me because I recently received my real estate broker's license. In order to purchase a property, most people will need to obtain a mortgage to do so. However, I feel that the lenders should only provide mortgages that are fair and only to those that qualify. Previous lending practices are part of the reason why the housing market crashed. People were receiving mortgages that they were not able to pay due to deceptive advertising and practices.

This regulation will have an impact on the real estate business because the ability to obtain mortgages is essentially one of the major factors in the decision to purchase a property. Without the ability to obtain and truly be able to afford a mortgage, people will not purchase.

2. Describe the proposal/change. (10 points)

The proposal is for "...additional protections and disclosure requirements for mortgage advertisements..." The proposal describes in detail what are considered deceptive practices. For example, a lender who does not include closing costs or loan fees in the loan amounts is considered to be misleading and deceptive. There are now certain record keeping requirements in place for mortgage advertisers. They will have to maintain two years worth of records that would include marketing materials and sales scripts.

This rule would also discourage real estate agents/brokers from providing even general mortgage information to clients. The rule also allows for the state to obtain civil penalties for violations that may occur.

http://frwebgate2.access.gpo.gov/cgibin/PDFgate.cgi?WAISdocID=cupI8e/9/2/0&WAISaction=retrieve.

3. Write the public comment which you would submit to this proposal. If the proposed regulation deadline has already passed, write the comment you would have submitted. Explain briefly what you wish to accomplish with your comment. (10 points)

My comment would be that I think this rule is long overdue. Putting the "final rule" in place will be beneficial not only for the economy, but for those who have a dream of obtaining a home. We have allowed lenders to bring false hopes and dreams with unfair mortgage terms, rates, and misrepresenting things like the ability to be able to refinance their home. I