Thanks for sharing the article. It definitely adds a human slant to what has become a media frenzy. 

What a sad state of affairs this is.  What makes me crazy is that some loan officer made lots of money doing these deal.  They had to know in the back of their mind that they were setting people up to fail.

The California Department of Real Estate recently sent a letter to all licensees advising them to refer any borrower who contacted them regarding a hardship with their mortgage loan to their specific lender for a workout plan.  This industry gets filled with vultures under favorable market conditions.  Some seek to convince non-suspecting homeowners that they are Trusted Advisors.   Well the last time I checked true Trusted Advisors don’t encourage homeowners to accept high risk loans on their primary residence so the can earn a small commission and keep their job while their companies can earn outrageous fees at the expense of the homeowner’s equity.  How can there be equity left when it has been stripped away with 3, 4 and sometimes 5 refinances within a 3 to 5 year spam?

When I seriously think about it I not mad, upset but bewildered!  There were many homeowners that I consulted and advised that a slight drop in mortgage would not justify the cost and fees, yet they went ahead and did their loan through another originator anyway and no face tough times.  I recently heard it said, “The truth would always prevail”.  The truth is out now and the proof of the pudding is in the tasting, but this pudding is a little tart.

Kate - I agree with you, but would expand to say that all kinds of people made lots of money.  I absolve no loan officer of their responsibility of putting anyone in a loan that is not in the borrower's best interest, but the numbers of people profiting off this frenzy who could have raised their concerns and didn't include builders, model home sale agents, buyer's agents, underwriters, and the very institutions who developed the program approval matrices.  The bottom line is that there are no doubt people who DID express their concerns that there were unwise practices at the time (I was one of them and lost business as a result in my own state.) but when you do that you get treated like a party-pooper at an orgy or someone who is "too old fashioned to understand the new business model."

Ntsike - your comments hit the nail on the head.  We both appear to have taken the same approach, lost some business during the feeding frenzy because of it, but both at least are still IN business.  We get to be part of the clean up crew!

Melissa - my thoughts too.

It's a very well-written article, and as you say it does put a human face on the situation.  Facts, figures, and statistics are one thing - seeing your neighbor pull away in a U-Haul at 1:00 a.m. is another.

For me, I'll continue to try and help one customer at a time out any difficulty they might be experiencing, while doing my best to always be part of the solution, not the problem.