There is no question that the home loan industry needs a fresh look and some adjustments have to be made to prevent in the future what just happened to it. Easy underwriting requirements were part of the reason the real estate market ultimately tanked and dragged the entire economy into a filthy gutter. But those, the underwriting criteria, really were poor business decisions and can't be regulated.

Anyway, Congress is working on all sorts of angles now to find the right reform solutions. The House just introduced an act that has a long name and lots of ideas, some reasonable and some less so, on how to restructure the whole thing. One of them goes deep into loan officer compensation, how it played a significant role in the meltdown and that it needs urgent revision. To see this issue command such a prominent role in all of this is beyond belief. It truly prompts the reader to go over it a few more times to make sure he got it right. A real head-scratcher.

There are actually several directions the reform effort should take to arrive at more meaningful improvements than leaning on mortgage broker commission setup. One of them is to overhaul the entire financial industry regulatory regimen. Currently there must be close to a dozen or so government agencies that are tasked with keeping an eye on what's going on. Their functions often overlap, there are nasty rivalries and coordination between them is less than what it ought to be. To make the system more efficient, all its work should be gathered under one or two roofs.

That's one thing. If the present regulatory system had functioned halfway as mandated this mess would be much less severe. The current laws probably are somewhat outdated but had they been enforced properly mortgage foreclosure rates wouldn't be anywhere near where they are now. So, where was the oversight of the Fed, SEC etc? The executive and legislative oversight?

It really appears that Wall Street is writing much of the new plan, laying blame on everyone else but themselves. And using the chaotic situation to further its own agenda.