Thursday, August 10, 2006

Why is "Full Disclosure" NO Disclosure?

When buying or trying to refinance a home, our governmental friends have decided that the consumer MUST have, "Full Disclosure" of everything that may, might or will happen.

On the surface this seems like a good thing, they have to tell you that there is a garbage dump a mile away that makes it stink or that there is an earthquake fault running through the back yard. They also have to tell you about all the fees, insurance options and interest adjustments.

Great They can hide nothing!!!! Woo Hoo we win!!! Or so some politician somewhere must be thinking. However, they are sadly mistaken in their thoughts.

The dishonest people will always find a way to sneak something past and now they can do it in plain sight. All they have really done is create a mountain of paperwork so large, that even the honest people struggle to find and point out all the really important items being disclosed.

It used to be that the needed one and two page forms that could be read, understood & completed by the buyer. Now we have enough forms, disclaimers & disclosure statements to make a speed reading lawyer's day go by. No "regular person" has the time or understanding needed to really digest it all, thus it is scanned at best and misunderstood or skipped too often.

So, we are back at least to where we were on the disclosure issue from the standpoint of the consumer being informed. The difference now is that the consumer has no recourse when they have a legitimate complaint as it would now go like this:

Consumer: "There is toxic waste bubbling up in my back yard."

Company: "Yes, that happens every few years."

Consumer: "Nobody informed me of that."

Company: "We most certainly did. It is in the 3rd sentence of the fourth paragraph on addendum A3 of page 357 in packet X, 'Disclosure of Unimportant Things We Encourage You to Sign Without Reading', I see here that you signed it."

Consumer: "But this seems an important thing that should have been highlighted."

"Perhaps, however, as you have already purchased the home, you may feel different when you sell it. Have a nice day & thank you for calling"

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