Wednesday, April 8, 2009
Mortgage Banking Business
The federal government's intrusion into the lending business is simply put, sending out a message that banks should quit lending. Having a 5 percent retainage by the borrowing lender on each loan will destroy the industry. Additionally, by determining the compensation rate of mortgage loan originators, some of the industry's most professional and successful originators will leave the business. Moving toward a treatment of all bankers as criminals does no one any good but furthers the rift between the government and the private sector. The warehouse lending issues are the root of our major problems especially since so few people are knowledgeable on the Hill as to how loans are really funded. Our state mortgage bankers association is trying to work with our congressional leaders to prevent the laissez faire mentality that caused this mess while not overregulating. The industry is in a mess but we must all stay at the table and fix the problems.
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2 comments:
Q - Let me preface my remarks by saying that I am not the sharpest knife in the drawer when it comes to discussing mortgages, banks and the lending practice - however -
I am not sure where all of the people who are going to be challenged by the shakeup with the govt getting involved are going to have another place to go...except to the government for jobs when it settles down. And I agree that the people on the Hill don't have a clue about much of anything, particularly guys like Barney Franks. I hate to just pick out one name but his is the one that comes to mind. We have too many things going on on too many fronts...economy, immigration, two wars, health insurance, social security, and still our President seems to want to take on all of the problems at once. He is either going to make a grand change that will be beneficial to everybody or he is going to take us all down at once. Since I am one of those people who does not care if it is good news or bad news, I hope whatever it is, happens quickly. Then we can hopefully start over, if needed, and get on with life. At the ripe old age of 68, I don't have a lot of time left to see changes and I certainly want the best for you and my children...also, the grandchildren. Anyway, just had to comment on your blog...hope all is well with you, Ginger and the children. Happy Easter!! Well, I have now been asked to select a profile and I must confess that I don't have a clue...hope you receive this.
Thanks for your comments. I find the doomsday talk show host comical because even if there was a grand conspiracy, our bureaucratic processes are slow enough that exposure would occur before the travesty. In the banking world, my association members who are being castigated by the politicians are doing quite well right now by refinancing mortgages at low interest rates but the talk on the Hill to change their fee structures and require banks to retain certain percentages of the loans they underwrite is simply grandstanding. Undermining a process that has worked for so long to cure a few ills is a bit overboard.
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