John Robbins had a revelation the other day when he went to the drug store to pick up his blood pressure medication.

"Pharmacies must detail the list of side effects of the prescriptions they fill," the next chairman of the Mortgage Bankers Association thought, "So why shouldn't we list the negative aspects of the various loan options borrowers are considering?"

The light bulb went on, and now Robbins is forming a special task force to look into the benefits of a simple, easy-to-understand tool that spells out the strengths and weakness of the loan the borrower has chosen.

"I see it as final gut-check for the borrower," the industry leader said last month at the MBA's National Secondary Market Conference in Chicago. "Here's what you've chosen. These are all the risks, and these are the possible rewards."

Currently the MBA's Chairman-elect, Robbins is calling on Fannie Mac, Freddie Mac and the MBA's Residential Board of Governors, or RES-BOG, to develop recommendations for an industry-wide disclosure document, and when and how best to deliver the document to borrowers.

Although some might see another form as just more paperwork in a business that is already drowning in paper, and others might look at it as a way to "dampen the enthusiasm" of state and local legislators to pass punitive laws, the chief executive officer of the American Mortgage Network in San Diego sees it as bringing more transparency to the lending process.

"This isn't about the industry being nervous," he told the conference. "It's about helping consumers make truly informed choices" and showing that their welfare is of the utmost importance.

"We need to do what baseball didn't do," he said, referring to the Major League's inaction regarding the use of steroids by Barry Bonds and other star players. "We need to take responsibility and show the world what we stand for."

The MBA officer said he is "passionate" about showing that lenders put the borrowers' interest above their own.

"Your customer's best interest is No. 1, ahead of your commission," he told his colleagues. "We need to somehow translate this into something meaningful to the consumer. After 33 years in this industry, I don't know any better litmus test."

The final piece of paper, perhaps a one-pager that outlines the chosen loan's pros and cons, is one way to "make it clear that we want consumers to make informed choices," Robbins said.

"They can be conservative or not-so-conservatives choices. After all, this is America," he added. "Just as long as they are informed choices."

Published: May 31, 2006

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.