Just how easy is it to get a mortgage? Some would have people believe that automated credit scoring, Internet loan applications and other whiz-bang features of today's home lending world make the process painless.

But some mortgage lending practices are so noxious that they are at the heart of reform hearings and negotiations in Congress.

One member of a mortgage reform coalition, Citibank official Douglas Webb, put it this way before a House subcommittee gathering Sept. 16: "The current patchwork of outdated laws and regulations governing mortgage lending serve no one well and have engendered waves of litigation against the industry."

The Good Faith Estimate
(What you see ain't what you get)

What exactly does "good faith" mean?

Who knows? And that's why borrowers at the start of the loan process can be told pretty much anything about what their closing costs will be in the end. Federal law requires lenders to provide a "Good Faith Estimate," or GFE, within three business days of the time borrowers submit their applications.

But the law lacks teeth, experts say, so lenders don't have much incentive to follow it. After all, if "Lender A" could lose a customer's business by saying closing costs will probably be $500 more than what "Lender B" said, why shouldn't Lender A just fudge the number?

"There is a requirement of a GFE, but it is, of course, an estimate," one Department of Housing and Urban Development official said in August. "When you get to the closing table, the numbers are higher than when you get quoted the loan, and there is no federal penalty for that discrepancy right now."

Even the APR can't set things straight

Some might think the annual percentage rate, or APR, given by lenders might help offset any confusion over closing costs. It's designed to reflect the cost of getting credit, so it includes everything that borrowers have to pony up at closing, right?

Well, actually, no.

According to a Federal Reserve table, the Truth in Lending Act requires that the APR include things like the origination fee, points and any charge paid by a borrower to a mortgage broker for services rendered. But anybody who's been through a mortgage knows that a host of other processes involved cost money. Many of those things, such as the property appraisal, title search and insurance, notary and some recording fees, credit report and flood certification, don't have to be included in the APR quote.

The result, experts say, is more confusion over just how much a mortgage costs.

YSP: Not as harmless as it sounds

It's sounds like another acronym for the millennium bug affecting computers worldwide, but the YSP problem has been a thorn in homeowners' sides for years. The letters stand for yield spread premiums (called "kickbacks" in more egregious cases where consumer advocates say these premiums have been abused).

In short, brokers arrange a higher mortgage rate for customers who don't have enough money for closing costs and the broker fee. Lenders, in exchange, pay those costs back to the broker. Trouble arises when unscrupulous brokers get unsuspecting customers to pay a higher-than-market rate in order to get more money from their lenders. Or, a broker might try to make more fee money by steering business to a more expensive lender, who in turn would kick back money from the higher-rate loan.

Industry representatives say the system helps borrowers in a bind who could otherwise not afford costs associated with getting a mortgage loan. But consumer advocates argue that the payments amount to an incentive for brokers to offer customers the highest rate possible in exchange for a greater payoff.

Several lawsuits have been filed over the issue, and it's not clear whether the system will be changed or declared illegal. In the meantime, however, borrowers should take note of how their brokers are getting paid.

"Consumers have been truly hurt by the payment of yield spread premiums; paying thousands of dollars more for their loans than their lenders required," according to Congressional testimony from Margot Saunders, managing attorney with the National Consumer Law Center.