BROKERS ARE DEAD? Really? I must have missed the bulletin on that one. It still amazes me how the entire regulatory community along with the Big Banks that are Too Big To Fail continue to spin the financial meltdown as something that was entirely the fault of Mortgage Brokers. It’s interesting to point out that there has never been a single Mortgage Broker who made any type of lending or underwriting decision what so ever. Yet somehow it has been the focal point of all regulatory reform, and the single biggest item that keeps getting pointed to as the reason for the entire housing mess.
While it’s true there may have been bad brokers during the housing boom, the uglier truth that no media or regulator wants to cover is that brokers had absolutely no lending authority what so ever! None! So if someone has no authority to make any relevant decisions then one has to ask; Who Did Have The Decision Making Authority? Well that one is simple, that would be the Bank. The same Too Big Too Fail Bank who would have you believe that none of this has been there fault or doing. Too Big Too Fail Banks along with other Bankers and Wall Street Banking Firms created all kinds of Sub Prime loans and then pushed them onto Brokers as their pawns to sell the products they created. Brokers never had the power to make the final decisions on funding. To make matters worse, many of the products they created were designed to fail and they knew exactly when the defaults would more than likely occur. This allowed Wall Street to simultaneously place bets against the very mortgages they were designing as sort of an insurance policy for when they finally blew up in everyone face.
Case in point, I give you Goldman Sachs who did exactly that.
The Truth is we need financial reform, but not in the form that we have seen thus far. HVCC killed the appraisers and made appraisals more expensive and lower in quality than we ever saw before, while at the same time allowing the Big Banks to own and operate some of the largest appraisal management companies in the country. Wasn’t the point of HVCC appraisal Independence? Now Loan Officer Compensation regs are doing to the originators what HVCC did to appraisers. Yet we still have not seen much reform with regard to the real culprits, the Too Big To Fail Banks who created, and pushed the products while telling consumers, regulators, and brokers alike that they were all safe. They did this while knowing the opposite was true, but somehow it seems the entire media and congress wants to sweep this ugly truth under the rug. Watch the video below, then let me know what you think? You opinion, views, and input matter and should be shared with all your State and Federal Regulators, and Representatives. After all, they do all work for you don’t they? Perhaps they need a prod and reminder of that, because the ones that seem to be represented best are not “The People” they are Too Big Too Fail Banks.