A new litmus test for mortgage brokers
Letter to the Editor
By Inman News, Monday, August 10, 2009.Re: 'Why single out mortgage brokers?' (July 31)
Dear Editor:
This is the first time I have ever heard anyone speak up for the brokers. Since the housing market crash, everyone has been blaming the mortgage brokers. Not one broker drew up those guidelines that were made available to the public.
We were given tools to work with that not only did we have to learn to use but we had to teach clients and other professionals who wanted only the end results (closing the deal).
Everybody (was) jumping in who didn't know the first thing about being a mortgage broker, but they could take a test and pass it and get a broker's license. I have personally been in the business for 30 years and there were people who had been around for only two years talking down to me.
The federal, local and state governments should require that you work under another broker for five years before being able to take the test. Now the government wants to take our money away! Why? To give it to the car dealers?!
I remember when it was against the law for a mortgage broker to recommend an attorney, real estate agent or any other professional in the real estate industry. Now everyone does as they please!
Jim Hamilton
JBH Financial Brokerage & Associates
Port Orange, Fla.
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Submitted by Bill Fooks on August 10, 2009 - 3:13pm.
Bill Fooks
TFT realty Marketing Service
Warwick, RI http://www.fooksteam.com
Mortgage Brokers are taking the blame, because congress does not want to point the finger at themselves. Always remeber, that the one finger pointed at you, results in three being pointed back at themselves. Also, congress plays by the golden rule: "Them who make the gold sets the rules". Don't take it too hard, work with the new rules and see where it takes you.
Submitted by Todd Tarelton on August 11, 2009 - 6:30pm.
Has anyone really looked at how credit scoring is a major cause of the real estate /mortgage crisis?
I've been a lender & broker for 30 + years and have seen my share of bad scores. 756 but he had a negative net worth of almost $375,000.00!
Lenders & Wall Street put the emphasis on credit scoring at the approval level & at the securitization level. Why? because you didn't have to think about income, job stability, net worth, source of down payment...they just looked at the credit score, approved the deal & bundled the mortgage off to dummies who securitized it because they thought a credit score had value!
The only reason a credit score has value is because it is hyped by the agencies that flog & profit from this nonsense.
Give me an underwriter/originator that knows his/her "turf" & understands that lending to an "investor" is vastly more risky than lending to someone putting a roof over his/her family.How in the name of heaven can an underwriter in Orange Co. California have a clue of the real estate markets in Chicago, Boston, Ackron,etc? If you are lending money & securing your debt with liens on real property, then you better know about the real estate you hold as security....don't worry about the real estate the borrower "scores" well !
Make lenders accountable for due diligence....prove the income, prove the source of down payment, evaluate the reason for buying, does it make sense?, require a independant physical inspection of every property, prior to closing & put credit scoring where it belongs, in the garbage.
If my pension plan or insurance company is going to buy an investment securitized by mortgages, then it only seems reasonable that there should qualified mortgages supporting that security, not just a "score".
Time to drag the heads of Experion, Equifax & TransUnion to Capital Hill for a public flogging & lay the blame where it really belongs.
Submitted by Gary Frimann on August 11, 2009 - 6:46pm.
Where I live, in CA, we have what are called California Finance Lenders (CFL's). They do not require a license from the Dept. of Real Estate. I would venture to guess that they wrote most of the bad loans, as they have never taken a class or even know what the term "fiduciary" means--if they have even heard of the term. They basically deealt in subprime mortgages. Further,so many, many many agents wrote their own mortgages, with some getting 2-3 million dollars in loans with 45 days on 2, 3, or 4 properties (note that is before the new loan showed up on a credit report; same 1003, same credit report, just a different different address that they could easily buy those properties. They knew nothing about cycles, and they thought they could flip the properties. They held on for a year by making payments with money they got from the Yield Spread Premium, and then their luck ran out. They are truly responsible for so much damage that was done! It was bad enough getting their clients on liar loans, and the thought prices would climb forever (which, they almost historically did) but they thought they were so much smarter than everyone else, and it was a fast road to riches.
Then, the bottom fell out, prices dipped, then plunged, and they just walked away...
It turned into the perfect storm. Throw those crooks in jail. 100% financing on an Owner Occupied home. How can one have 3 owner occupied homes bought within 45 days???
Gary Frimann
Broker / Owner
EAGLE RIDGE REALTY /
SIGNATURE HOMES & ESTATES
http://www.EagleRidgeRealty.net
http://www.SignatureHomesAndEstates.com