As the sub-prime mortgage industry continues to make headlines we hear from one of our most esteemed members on the US Senate, Charles Schumer. He says ‘The mortgage brokers are the wild, wild West of mortgage finance". Annie, get your gun.
That must mean the US Senate, is the OK Corral. Them Cowboys know a thing or two about "if you scratch my back, I'll scratch yours". Let's form a posse and strait'in this mess out. WANTED! Mortgage Brokers. REWARD
Mr. Schumer's remarks imply that this industry wanders around unregulated and therefore anything goes. I hardly think that's the case. in fact it may be over-regulated. How can you say this? You ask.
Have you ever signed loan documents? Chances are pretty good that you have either bought property or refinanced it. Then you know what I mean. It can easily take 30-45 minutes to sign this ream of paper they call "loan documents". And chances are, this is the first time you have seen them, much less have had the opportunity to read them. It's "High Noon", and the hangman has you by the neck.
Herein lies the problem. In an effort to regulate the industry and make every disclosure known to the free world, the process has become so complicated most people don't understand it. Did you read the software license before you installed the new software on your computer? Of course you didn't. If there is something in the license that doesn't appear quite right, it doesn't take long before its all over the internet. The loan process is different. People generally feel that they have an unwritten trust with their loan originator. They want to believe they are being treated fairly.
Watch out for friends and family. These people usually know if you approach them, your not shopping around. The sad part is alot of the unscrupulous business practices could be eliminated if people would shop around before deciding on a particular service provider.
I also think that Mortgage Brokers may have too many fingers unfairly pointed their way. Many of these loans were "liar loans". An applicant is ultimately responsible for the information they provide to the loan originator, and property values had to level off sometime. Maybe folks were just caught bluffin at the poker table.
Its time we simplified the mortgage process. Make it where plain folks can understand it. We don't need more government regulation, which only serves to admonish the respectable people in the industry. Crooks will always be crooks, and no amount of intervention from Sheriff Chuck will ever change that.
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