Stay Out...

So the drumbeat against mortgage brokers is about to ratchet up an additional notch as the President announces plans on broadening the FHA's role, increasing government regulations on mortgages, and tightening the noose on mortgage brokers.

One of many stories is here.

To be blunt... this is a bunch of crap. I'm not insensitive to people facing foreclosure, but this is not a problem relegated to third-party originated loans, and it is not something deserving of a bailout. That might not be what the article clearly said... but read between the lines and the rest of the press, and you will know what is happening.

Mortgage brokers are the people who work past 5pm, who consult with their borrower for hours or even days to find the loan that suits them. Mortgage brokers are not the evil of society and have not caused the current issue. The problem stems from stagnant or falling house prices, rising or stagnant interest rates, a steady increase in the prime rate along with new credit card/bankruptcy legislation that made credit card payments higher, and too many people thinking they could make a quick buck flipping houses. That coupled with regional property tax increases because government wanted to get in on a booming housing market too... and now the boom has busted and the hens have come to roost.

Mark my words... the last thing that will help homeowners is to tighten legislation on mortgage brokers and limit mortgage products. Think about it... if you have a homeowner in a crunch and you take away their refinance options, what is going to be left for them to do? If they can't afford to stay, and they can't afford to sell, the only option left is foreclosure. As the government gets more and more involved (it already has in North Carolina), the foreclosure rate is going to go up, not down. Count on it.

Sadly, George W. Bush might have lost the last bit of hope I had for his legacy. What true conservative believes the answer to society's ills is more government legislation and bureaucracy? That sounds like a liberal mindset to me. NO LENDER WANTS TO FORECLOSE ON A HOME. NO LENDER OR BROKER ORIGINATES A LOAN THINKING IT WILL GO INTO FORECLOSURE. LENDERS LOSE WHEN HOMES FORECLOSE. Get it. The market and the industry can take care of this and will if government stays out. Unfortunately, government isn't, and thus the industry is reacting faster and harsher trying to stem the tide. This WILL NOT end good for people in the mortgage business, and it will not end good for the typical homeowner who finds themselves outside of agency (Fannie/Freddie) guidelines.

Conservatives believe in limited government, free markets, self-determination, and personal responsibility. Where are those ideals? George? Anyone?