Comments on: Mortgages: Who’s To Blame For The Lending Crisis? http://www.fhaloanpros.com/2007/11/mortgages-whos-to-blame-for-the-lending-crisis/ The Unofficial Guide to FHA Loans & Mortgages Sat, 21 Nov 2009 05:11:37 +0000 http://wordpress.org/?v=2.6 By: Jason Vondrak http://www.fhaloanpros.com/2007/11/mortgages-whos-to-blame-for-the-lending-crisis/#comment-886 Jason Vondrak Tue, 20 Nov 2007 04:49:36 +0000 http://www.fhaloanpros.com/2007/11/mortgages-whos-to-blame-for-the-lending-crisis/#comment-886 Peter,I agree with you partially, you are an intelligent person. However, consumers do have access to more information than they need. Of course loan officers and banks have more information than consumers. The sky is blue. I am in total aggreeance with you on banks having the obligation to inform their consumers about their products before selling them. Consumer's are not "entirely" dependent on banks for info. It is also important to note that option arms, while risky, are not necessarily bad for everyone. If used properly they can be an extremely effective cash flow tool. You are right though, many of these arms were pushed onto consumers who were misinformed by their brokers whom were given higher compensation in return. By the way, that is really great for your "little community bank" and I mean this from a profit standpoint not an ethical one. Let us remember that banks are in business for one reason and one reason only, to make money. Some banks are going to use high risk bank products and some are going to use low risk products, but in the end they are both aiming for the highest profit possible. Another quick correction referring to your comment on the federal legal system not punishing predatory lending and overcharging borrowers. First off, there was a small company "Ameriquest", maybe you have heard of them. They were pretty much shoved out by the fed and fined 100's of millions. Second, the federal government most definitely says overcharging borrowers is a crime, its called section 32, check it out for your records. In response to the "It is socialism when the fed reduces the discount rate to bail out huge banks and lenders." Now we are getting into economics and this is a separate issue. Lets first address your inadequacies in real estate finance, business ethics, and business law. These are inflationary measures used to offset a recession so that we can compete in the global economy. The question of the day is "why didn't federal regulators put an end to this before it got out of hand? I suppose you will side with me on this one. I guess the reason is that when everyone is making money there are no problems and everyone is happy. You can point the finger at Greenspan now because hindsight is 20/20 but I don't think this will make matters better. I guess had Allen been psychic, he could have foreseen this mess. I strongly believe that had the fed known that such a mess was lurking around the corner, they would have acted accordingly. In order to move the economy forward, we must not dwell on the mistakes of the past but rather learn from them and fix them. Step one is quit pointing fingers and start educating borrowers. Peter,I agree with you partially, you are an intelligent person. However, consumers do have access to more information than they need. Of course loan officers and banks have more information than consumers. The sky is blue. I am in total aggreeance with you on banks having the obligation to inform their consumers about their products before selling them. Consumer’s are not “entirely” dependent on banks for info. It is also important to note that option arms, while risky, are not necessarily bad for everyone. If used properly they can be an extremely effective cash flow tool. You are right though, many of these arms were pushed onto consumers who were misinformed by their brokers whom were given higher compensation in return.

By the way, that is really great for your “little community bank” and I mean this from a profit standpoint not an ethical one. Let us remember that banks are in business for one reason and one reason only, to make money. Some banks are going to use high risk bank products and some are going to use low risk products, but in the end they are both aiming for the highest profit possible.

Another quick correction referring to your comment on the federal legal system not punishing predatory lending and overcharging borrowers. First off, there was a small company “Ameriquest”, maybe you have heard of them. They were pretty much shoved out by the fed and fined 100’s of millions. Second, the federal government most definitely says overcharging borrowers is a crime, its called section 32, check it out for your records. In response to the “It is socialism when the fed reduces the discount rate to bail out huge banks and lenders.” Now we are getting into economics and this is a separate issue. Lets first address your inadequacies in real estate finance, business ethics, and business law. These are inflationary measures used to offset a recession so that we can compete in the global economy.

The question of the day is “why didn’t federal regulators put an end to this before it got out of hand? I suppose you will side with me on this one. I guess the reason is that when everyone is making money there are no problems and everyone is happy. You can point the finger at Greenspan now because hindsight is 20/20 but I don’t think this will make matters better. I guess had Allen been psychic, he could have foreseen this mess. I strongly believe that had the fed known that such a mess was lurking around the corner, they would have acted accordingly. In order to move the economy forward, we must not dwell on the mistakes of the past but rather learn from them and fix them. Step one is quit pointing fingers and start educating borrowers.

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