This started out to be a comment on another blog. I don't know the blogger, a Realtor® of unknown experience, reading his home page didn't help. The subject, mortgage brokers as investment advisors, is worthy of further discussion.

I'm not advocating mortgage brokers as investment advisors, but I believe educating the client as to his options is the moral responsibility of every loan originator. Most people don't know they have options.

Sir,

Don't stand in front of any mirrors! That finger your pointing might hit the right target.

I know the NAR's spokesman told congress that those evil mortgage brokers forced buyers into homes they couldn't afford. Can any thinking person believe that? I've been in lending and real estate since 1969 and I don't know how to force a buyer to over buy. I must have missed that class. I have taken many, many NAR sanctioned classes that taught that the home buyer should buy the largest, most expensive house possible. The idea was the buyers would be happy with the house longer than a smaller less expensive one. Realtors® also taught leveraging your real estate, and that even at the same appreciation/inflation rate you make a lot more on bigger/more expensive more leveraged house.

Many have conveniently forgotten that wisdom! It's a shame because it was good advice then and it's good advice today!

Everyone wants to point a finger, but no one points to themselves or at the consumer who stopped making his payments!

You're right it would be better if mortgage brokers weren't acting as investment advisors, better for the mortgage brokers. We've got a generation of Realtors® that have replaced financial statements and credit reports with "pre-approval" letters, yet continue giving real estate investment advice! Yes, buying a single family house even to live in is real estate investing. Without all the buyer's information, that advice can only be relevant to their own commission.

The mortgage broker is the only one who rigorously reviews the client's entire financial position and knows all his alternatives. Just how many of your clients have a financial planner, fee or other wise? Even if they do have a financial planer it's unlikely they know anything about real estate and mortgages. Real estate investment requires hands on involvement, Financial planners prefer hands together investments, you know the kind where after the purchase your only involvement is to put your hands together and pray!

Most people don't think of themselves as investors or potential investors, until somebody knowledgeable explains their position to them.

With out credit and financial statements, all to many judge a buyers ability by the car he drives into the parking lot, not even thinking that Hummer comes with a $50,000.00 loan.

Most people think that because most real estate investors invest in single family houses and that's what home salesmen sell, that investment and home salesmen are the same, they're not!

For all the problems, stop and consider the success rate of all those sub-prime loans. We've had the largest most successful growth in home ownership in the history of the world. If it weren't for the politicos this would be celebrated!

There are going to be a lot of people falling out of the business. Finger pointing won't save you. If you want to shrive I suggest integrity and education.

Bill

William J Archambault Jr

The Real Estate Investment Institute

http://www.williamjarchambaultjr.com