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Let’s reform the subprime mortgage industry. Seems like a fair enough statement doesn’t it? It is akin with “save the whales”, I mean really, who doesn’t want to save a whale? The problem is that the writer that demands that we save the whales is the same writer speaking out for mortgage reform and is literally clueless as to the dynamics of the situation.
Regardless of the facts made in this article it will be dismissed as biased or pro mortgage. Do not believe anything you read beyond this point. Look up and verify these following facts on your own, and then you do call your representative to stop this bill. The reform bill will cripple an already injured banking system and make receiving a mortgage next to impossible for the average person. Brokers and correspondent lenders originate Fifty percent of all mortgages. Much like bread companies, department stores and food chains they buy a product, mark it up, and they sell it. Their product just happens to be money. The more they mark it up the more money they earn. However, if they mark their product up too much they will go out of business due to a lack of competitiveness. It’s called a free market system, and most writers who would write to save the whales vehemently oppose it. In a nutshell, legislators want to limit or even cease the ability for lenders and brokers to mark up their product and resell it. If that were not enough, legislators want to extend all liabilities incurred by the broker to the investor who buys the loans from them. This will effectively end these brokers and small lending in America. Let’s apply this logic to other industries. If you trade your old car in on new one and the dealership in turn sells it to another person that person will now be able to sue you if your car breaks. Stop, do the math. If the person that buys the car from the person you sold the car to can sue you are you going to trade your car? Of coarse not, car dealers will drop like flies, as will banks should this bill get passed. Who do you think wins if the smaller lenders and brokers go out of business? That’s right, the bigger banks. Simple economics folks, if demand remains steady and supply is limited what will happen to prices? Which customers will be served last? Do the math! Correspondent lenders and brokers facilitate Fifty percent of all mortgage originations. Hello, is this thing on? In 2002 Roy Barnes and fellow Democrats passed this same type of legislation in Georgia called GAFLA. Lending came to a halt. Banks simply stopped lending and many pulled out of Georgia all together. Roy Barnes was soundly beaten at the next election, GAFLA was amended and lending resumed. Telling companies that they cannot make a profit or how much they can make always stagnates competition and hurts consumers. I implore you not o not take this writers word for it, research it. Do the math and the homework. Once you have, please call your representative to stop this bill. Aubrey Clark - Aubrey is a Loan Officer in Atlanta Georgia. He also spends time as an Author and Editor for LendFast.com - Specializing in Home Equity Loan Lending Tree Tips |
