Problems in the Mortgage Industry

Confessions of a Loan Jockey: The news is full of it. Every morning as I struggle to awaken I peruse my local paper only to get more bad news followed by even worse excuses as to what the in the world happened to the Mortgage Industry and the homeowners we serve. I have been in this business for a long time by industry standards, 14 years, and I tell you the truth that our industry is dirty and full of fraud. I see that many blame homeowners for getting in much too far over their heads. Taking loans with high APRs, ARMs with disgustingly high margins tied to indexes that are just plain unstable. Wholesale Lenders are blamed for even coming up with the programs of 100% financing for borrowers with bad credit. I guess we forgot that in a capitalistic economy the market demands the products its fed? Tisk, tisk… Shame on us.

The reality of it is simple: Those of us who call ourselves industry professionals have let many of our clients down and made them our victims, all in the name of Chasing the American Dream. How many people are loosing their homes due to never fully understanding the loans they were given? How many loan officers actually abide by Federal Law and provide their clients the documentation required to make a properly educated decision? How many fake tax returns have been typed? How many times did we ignore the IRS form 4506 in a funding package? Worst of all, how many of times was our fiduciary duty abandoned when explaining loan terms to our overly trusting clients? It’s enough to make one want to work a Dairy Queen as penance for ones sins.

I wonder, out of all the foreclosures we see popping up in every neighborhood in the country, how many of those original loan packages have blatant fraud in them? All perpetrated by an industry gone Hog Wild for the good of the consumer. You might wonder: “What in the world is this guy jabbering about?” “How could he know such things?” Well for some time I worked as a Compliance Officer for a fairly large retail mortgage company and saw with my own eyes the lengths to which some Loan Officers, with no regard to the financial health of their clients, prey upon the unsuspecting first time home buyers of our area. I was charged with stopping the fraud taking place in my office and you know what? I failed miserably. Money is addictive and the pickings were too easy. Many of our clients were immigrants, working hard the fields of a largely agrarian economy and now loosing the piece of the pie that was never available to them before.

I left that job after trying in vain to stop what was taking place. I was told that “Everyone else is doing it, if we don’t then the guys down the street will.” I didn’t believe it then but my morning paper says otherwise, everybody is doing it or so it seems and that is saddening. It’s not the American Consumer that needs to look in the mirror when looking for a goat. It’s the mortgage industry as a whole who has the horns and beard and and loves chewing paper. What the homeowners of this country are guilty of is trusting the wrong group of shysters and if they chose never to do so again, then I wouldn’t blame them a bit.