Texas Mortgage: Have you hugged your mortgage broker today?

Have you hugged your mortgage broker today?

Mylendingplace Response:  Mortgage brokers, no doubt, played a roll in the recent housing crisis.  However, mortgage brokers simply broker loan to larger banks like Bank of America, Chase, Flagstar, Citi.  That’s why we are called Mortgage Brokers.   We only offer loans that are made available to us.  We aren’t either good or bad.  We are only as good or bad as the programs that are made available to us.

And because we broker loans (to larger banks) the best way to regulate a mortgage broker is to regulate the banks that provide the product we sell.  Not the other way around.

Yet, almost ever piece of regulation is focused towards (or I should say against) mortgage brokers.  Yet the banks simply get wink and a smile, when in fact most of the sub-prime loans came out of banks that partnered with production builders.

Take 100% loans, for instance.  Don’t attack mortgage brokers with regulation– after all we simply broker’d the loans that banks want us to offer.    

100% programs weren’t bad. Many solid credit borrower’s bought home with these programs. 

I, personally, helped teachers, engineers, and PhDs buy homes this way. 

 If fact, my very last 100% loan was for a professor out of El Paso. He was literally a rocket scientists.   (Rocket Propulsion Specialist).

He wanted to preserve his capital and didn’t want to put any money down.   And he was cool with the higher rate that 100% loans brought at that time.  He, like any intelligent borrower, viewed his loan as a tool not as “something good” or “bad”.  Nor did he view his mortgage broker (me) as a good or bad entity.  Rather he liked my low closing costs and service  So he used Mylendingplace.com.

I brought choice and lower fees.

 But, for some reason, 100% were deemed a “bad loan” And look at what happend to the housing industry when these programs were removed.   Instead of looking at credit worthy borrrower’s and eliminating some programs that clearly shouldn’t have existed in the first place, the regulators look at mortgage brokers as bad–banks are good.   When, in fact, every loan right now is fannie/freddie.

 It really just comes down to fees/rates/and service.

I’m not advocating 100% programs, I only using 100% loans as an example of why loans–in and of themselves–or the people who offer them– aren’t the cause of the housing crisis.

So by passing regulation against mortgage brokers this is only hurting the mortgage environment and real estate as a whole.   Again, we create choice against the big banks.   Don’t want to pay Bank of America’s applicaiton fees and/or discount points–call a mortgage broker–who, typically, have lower overheads. 

If you want to see a totally corrupt housing market, force all the mortgage brokers out of business and you’ll see what Wall Street/White House  really want.   A single, solitary bank system  that can charge anything they want. After all, doesn’t competition hurt the large bank’s profit structure?

Mortgage brokers serve a vital role in the housing market. 

We offer choice.  

And where there’s choice, there is a competitive advantage for the the consumer.  Lower prices.   Think about it.  If there are only 2 banks in town (Bank of America and Wells Fargo) those banks would simply collude and set the price for everyone.  When people have choice, they have lower prices and better service.  It’s called capitalism.   When everyone is run out of business and there’s only a central bank it’s called corporatism.

When people complain about Capitalism they are really referring to Corporatism.  The only thing worse than Corporatism is Socialism.  It’s simple.   Allow choice in the market and regulate lightly–and when you regulate, don’t just regulate one group at the request of a well-funded lobby group. 

What’s good for the goose is good for the gander.

Click for http://en.wikipedia.org/wiki/Collusion

 http://en.wikipedia.org/wiki/Corporatism

http://en.wikipedia.org/wiki/Socialism

Have you hugged your mortgage broker today?

Jon Spears, Lic. Mortgage broker #56651

www.mylendingplace.com

(Jon Spears has been fingerprinted, met financial/net asset requirments, he’s been tested twice for financial literacy and he’s been around for 5 years.  Can your bank loan officer say that?)  :)

Here’s the article.

http://news.yahoo.com/s/nm/20100728/us_nm/us_usa_fed_mortgages

WASHINGTON (Reuters) – Mortgage loan originators will have to be fingerprinted and sign up to a central registry to do business in future, according to final rules issued on Wednesday by the Federal Reserve and other regulators.

The rules are part of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, also called the S.A.F.E. Act.

They were issued by the Fed, Comptroller of the Currency, Federal Deposit Insurance Corp, Office of Thrift Supervision, Farm Credit Administration and National Credit Union Administration.

Mortgage brokers came under tough scrutiny in the wake of the 2007-09 financial crisis, with some lawmakers and regulators sharply critical of underwriting standards and practices that were seen as so loose they helped foster a housing price bubble.

The S.A.F.E. Act specifies that mortgage brokers who are employees of agency-regulated institutions must register with the Nationwide Mortgage Licensing System and Registry,

“As part of this registration process, residential mortgage loan originators must furnish to the registry information and fingerprints for background checks,” a joint release from regulators said.

The final rules take effect on October 1 and it is anticipated that the registry could start accepting registrations as early as January 28, 2011.

Industry sources say that thousands of brokers have gone through mandatory education, credit checks and state and federal testing in order to retain the right to handle mortgage originations.

The process has thinned the ranks of brokers, who may be even fewer soon given talk of a 30 percent fail rate on testing, said Bob Moulton, president of Americana Mortgage Group in Manhasset, New York.

“It cleaned up the industry,” said Moulton, who nonetheless cautioned that he felt credit availability for mortgage lending has been reduced as a result of uncertainty caused by U.S. financial regulatory reform