Illinois AG to Fed: End Incentives for High-Risk Mortgages

StephenF at 05:22 2009-12-30 said:

Hey Lisa Madigan, thanks for shutting the barn door after the horse has left. My dear our problems go a bit deeper than Originators making more money for risky loans these days. Why don't you simply call for 30yr & 15yr mortgage programs only...That would seem to eliminate "risky" loans there genius. Maybe it's me but I think the problems stem more from lack of wages. Any bright ideas re: employment Lisa? Permalink

KBB at 10:05 2009-12-30 said:

The problem overall stemmed from greed and a lack of ethics. Was it really a difficult deal to structure or did the originator, Broker or Retail channel, just see the dollar signs and not the borrower as a person? Did the Underwriter have the guts enough to stand firm and not approve a questionable loan or just whine that they were 'forced' to approve it? Can Lisa Madigan solve the mortgage industry problem solely by herself? Certainly not. However, she does have a proven track record of getting things done and for the right reasons. Truly a shame that those characteristics are not overall traits in the mortgage industry - then and now. Permalink

StephenF at 22:05 2009-12-30 said:

Truly a shame that those characteristics are not overall traits in the mortgage industry - then and now.

Obviously nothing can be done about "then" but IMO if you want to do something about now simply reduce all programs options to 30yr & 15yr, based on her assertion that would eliminate the "risky" factor. I would also argue (have in other posts) that if you want to further remove the unethical from this business eliminate the ability to advertise interest rates. All Origination channels would then be forced to compete on professionalism, knowledge & customer service, otherwise how else would a company be known.

Did the Underwriter have the guts enough to stand firm and not approve a questionable loan or just whine that they were 'forced' to approve it?

I do believe that there are/were many UW's who had the guts and did take issue with the loans being presented...they were simply roughed up by Big Shot Account Managers who yelled & screamed, and Upper Management who were content with placating the big mouth AE's and the Originating sources, ultimately signing off on the bad loans (and making big bucks mind you)...to lay blame at the feet of the UW is painting with too broad a brush. Permalink

KBB at 09:06 2009-12-31 said:

Truly a shame that those characteristics are not overall traits in the mortgage industry - then and now.

Obviously nothing can be done about "then" but IMO if you want to do something about now simply reduce all programs options to 30yr & 15yr, based on her assertion that would eliminate the "risky" factor. I would also argue (have in other posts) that if you want to further remove the unethical from this business eliminate the ability to advertise interest rates. All Origination channels would then be forced to compete on professionalism, knowledge & customer service, otherwise how else would a company be known.

Did the Underwriter have the guts enough to stand firm and not approve a questionable loan or just whine that they were 'forced' to approve it?

I do believe that there are/were many UW's who had the guts and did take issue with the loans being presented...they were simply roughed up by Big Shot Account Managers who yelled & screamed, and Upper Management who were content with placating the big mouth AE's and the Originating sources, ultimately signing off on the bad loans (and making big bucks mind you)...to lay blame at the feet of the UW is painting with too broad a brush.

I'm not solely blaming the UW as I happen to be one of them and have experienced the yelling, whining and even retaliation of employment. However, the UW cannnot be blamed if that UW did not approve the loan. Sorry - there's no excuse for an UW compromising personal integrity as well as the overall responsibility to the lender.

As far as a company making their presence known - customer word of mouth/referrals is usually a good source. However, let's not forget the marketing strategies/advertisements of the lender who is 'the lender for the people', 'we care about our customers', 'blah, blah, blah'.

There's market share to obtain and some, from Originator to Processor to UW to Closer to Mngr (pardon me if I've left someone out) will stop at nothing to get it in spite of what has transpired in the past few years. Permalink