Posted: Mon Apr 16, 2007 2:22 am Post subject: Are brokers responsible for subprime mortgage market crisis?
As we all know, the subprime mortgage industry is under severe disturbances with increasing number of defaults and delinquencies on the part of borrowers who have been approved for a loan inspite of being less creditworthy.
All across the nation, lawmakers, federal bank regulators, advocates and industry professionals are criticizing brokers as they feel that brokers have made several loan transactions possible even for those who couldn't have afforded a mortgage.
However, brokers are defending themselves against criticism from lawmakers and politicians. They feel that if things are going wrong in the industry, the lawmakers and regulators need to find them out and fix them rather than criticize brokers.
Brokers are of the consensus that every industry has bad people as a part of it, so one should try to remove the bad people rather than make things uneasy for the good ones too.
Being a part of this community, I feel we should do as much as is possible for us – we should support those industry professionals, be it a broker or a lender who really work hard to make homeownership a possibility for every American. At the same time, we intend to raise our voices against those professionals who do not follow the norms of the industry and are thereby responsible for the current turmoil in the subprime mortgage market. _________________ Home buying made simple with Community booklet
I too feel this i some kind of injustice being done to brokers. I mean every industry has bad apples but you need to figure them out and eliminate them. But to criticize all for a few is really a bit harsh.
I am a broker working in the California industry for 20 years. I must say that it is unfair to identify the entire network of brokers operating in the nation as responsible for the subprime disaster
Posted: Mon Apr 16, 2007 11:54 am Post subject: Not just brokers- most are just the "middlemen",
Hello- This is Ken, and I've been researching and working in the mortgage biz for over a year as I've been developing the AMF mortgage option.
I've had much to say about this topic- in previous Posts, and in my Blog (see link below).
Taking out the 5-10% of brokers who may be a bit scandalous and unethical, brokers are not the problem. It is a systemic problem with the whole home financing industry. Banks, lenders, realtors, buyers, sellers, appraisers all created this mess over the past 10 years. Only a return to a normal RE market was needed to show all the problems and cause a lot of strife and public backlash.
The mortgage industry will live on, put I believe it is getting what was coming to them. In the long run, everyone will wise up a bit and maybe the buyers will be a little more prudent when they do their own mortgage shopping. Isn't that what mortgagefit is about??
Thanks,
Ken L. _________________ For some interesting insight, please check out my Blog @ http://homequitybuilder.mortgagefit.com
I agree with you Ken. It's not the brokers only. In all, there are a group of mortgage professionals doing certain illegal things and polluting the entire industry. But it's a sad thing that these people somehow get away and people who are really hardworking and follow the ethics become victims of stricter laws that impose further restrictions in their practices.
I am glad that Jessica started this thread. At least through our community, we can raise our voices and give opinions which will help to make buyers aware of the truth behind all that is happening. _________________ Know how to compare lenders with mortgage booklet
There's plenty of blame to go around. I was involved in the sale of a home not long ago. The buyers admitted to being "broke" on moving in. They had previous bankruptcy, and got into the house for nothing down and 100% financing. Besides the mortgage payment, it would take $2-3000 per month just to live in this house (utilities and other bills) Also, the mortgage company, lets say Countrywide, attempted to manipulate the sale price of the house, but that's another story. The way I see it, it's mainly a matter of companies such as Countrywide and others reaping what they have sown.
It is the corrupt practices of unscrupulous people in the industry for which an entire community of brokers are being blamed. That's unfair on the part of people who really provide good services and take care of their customers.
By the way, you said a company like Countywide attempted to manipulate the sale of your home. Well, I find people speaking about this company and taking loans from them.
If you have anything to say and share your experience with this community, feel free to do so. You will be helping a lot more people to stay away from a company which may have troubled you and perhaps can trouble many.
Feel free to put down your experiences in our section - Experiences with Mortgage Companies
Jessica
