The Bankwatch

Tracking the consumer evolution of financial services

Mortgage regulation in US has worked judging by dramatic impact on brokers

Here is one set of regulation that seems to have worked. The article recounts one broker who is down from 85 on staff to 3.

What is intriguing is that the bankrate article seems to suggest this is a bad thing. The reasons provided in the quote below just sound like back to basics banking process that provides lenders and customers protection.

In fact it suggests brokers can only operate in a loose credit/ no diligence environment. I do not believe that and surely there is a model for brokers that involves lending discipline.

Credit histories must be dutifully compiled for all borrowers. And any number of new criteria can lead to a refusal to lend. One new practice closes the door on loans to anyone who’s done a short sale — a way of selling a house when the sale proceeds fall below the balance on the mortgage — in the past three years.

Written by Colin Henderson

August 28, 2010 at 14:42

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