So it has been awhile since I wrote. the mortgage industry has been through so much and yet there is so much yet to change... It seems like I have been in this industry forever, and then again it seems like I must have just started today.  There is a new threat on the horizon. I feel obligated to share it with everyone here, just in case you haven't gotten the information from another source.

This text is direct from the letter I sent to my Congressman. I might suggest you copy it and send it to yours!

November 4, 2009 

Congressman:

I write to bring your attention to a very serious proposal that WILL HAVE detrimental impacts on the housing industry and the economy. I am a member of the Real Estate industry.  As a Mortgage Banker I have focused and worked through the housing bubble. I agree that we need to enact reforms, and enforce current laws to ensure that the events that led to the current financial market crisis are not repeated.  However, I am deeply concerned that Subtitle F of the Financial Stability Improvement Act will have a devastating impact on the market, forcing community based lenders to reduce lending or even go out of business. 

 As this proposed legislation is written I can guarantee you that the company I work for would cease to exist. The company started in 1987 and serves 48 States. We offer a platform based on service and expert advice to our clients. We serve clients from all credit and income backgrounds. We do so without prejudice and within the laws currently in place.

 If subtitle F of the Financial Stability Improvement Act is passed in its current form the only lenders left standing will be the largest institutions.  The result would produce a handful of large, "mega-lenders," reducing competition and choice for consumers - an ironic and counterproductive result for a bill intended to mitigate "too-big-to-fail" concerns.

 Community Lenders, Banks, Credit Unions, and Local Banks, will simply not be able to cover the 10% retention. Even reducing this retention "skin in the game" clause will cause increased costs to the consumer, and stricter credit qualifications.

 Today, most lenders provide consumers with safe and affordable mortgage products. FHA loans have become the market share leader. Increased over sight or credit overlays have surpassed the solid time tested underwriting guidelines provided within the 4155 guideline manual. Lenders need, and borrowers require local market knowledge and high quality personal service.  But these lenders rely heavily on the ability to sell to the secondary market. Today, these lenders represent more than 40% of all home mortgage originations.  I assert that this proposal, if adopted, would cause ALL of these entities to fold.

 H.R. 1728 already has language that protects against a repeat of the steps that led to the real estate disaster. I would urge you to promote the risk retention standards as described in H.R. 1728 as the securitization framework for consumer financial assets in the systemic risk legislation that is being marked up this week. I am not supporting the entire bill as a whole, rather specifically speaking about the risk retention piece.

 I thank you in advance for your efforts in this difficult time for our country. Health Care, jobs, stimulus II, and cap and tax are serious threats to our State and the United States. This smaller "devil in the details" proposal is just as lethal.

 Best Regards,