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Mortgage Brokers Not Regulated?

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Real Estate Technology with Content, coding, marketing, host.

I'm still miffed over that comment in the September 11th cover article in Business Week entitled "Nightmare Mortgages" which said, "Banks tapped an army of unregulated mortgage brokers to do what needed to be done to keep the money flowing, even if it meant putting dangerous loans in the hands of people who couldn't handle or didn't understand the risk."

Unregulated? You've got to be kidding me! On which planet are mortgage brokers unregulated? Furthermore brokers aren't lenders and lenders are very much more regulated. I will admit that I don't agree, at ALL, with the viewpoints shared in the article about the Payment Option ARM loan solution because it blames the loan and the lender ... not the borrower. Agreed there are unscrupulous loan originators but their broker and the lender are ultimately responsible for their actions even if not directly. And you had better believe there is not one unregulated lender in this nation making loans on primary residences. 

I'll tell you who is unregulated. Reporters, journalists and writers. That's who is unregulated. They can write anything they want and then claim "freedom of the press". Just becuase you read it in a national publication does not give any indication that the information contained therein is accurate. 

The truth is mortgage brokers are the best place to go for a loan and if you're not in the industry you may not have heard of the report "[The] study found the APR (annual percentage rate) on broker-originated first mortgages were 1.13 percentage points less than loans originated by lenders, and 1.98 percentage points lower on second mortgages." http://RealtyTimes.com

And by the way, I constantly push for the requirement for all loan officers, mortgage originators, whatever you want to call the person who accepts the application and suggests the loan product to the borrower, to be regulated (licensed, bonded, continually educated, etc.) in every state. 

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I started writing on Active Rain in 2006 when I was representing the mortgage industry. I am no longer in that industry and many of the older posts contain outdated information. Please do not contact me for LENDING or MORTGAGE questions but rather contact a licensed mortgage professional from your area. I have always been in marketing and branding and that is still what I do. Thanks for reading!

Comments (2)

William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX
Ken,

I would love to add to this, it’s one of my faviorite subjects, but you’ve said it so well.

Keep up the good work.

Bill

William J Archambault Jr

The Real Estate Investment Institute

http://www.reii.org

Sep 21, 2006 06:14 AM
Brian Brady
Matthews Capital Markets - Tampa, FL
858-699-4590

Ken, 

I posted/blogged right afterthat BS article came out about the very same thing. 

Perhaps the author should watch me deal with the AZ DFI, Florida Dept of Banking, NY STATE DFI, or California DOC once a year. 

Sep 21, 2006 01:12 PM