Three Barriers to Solving the Mortgage Crisis

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span                            surveyors, paint stores, home
class="cap">In late     supply chains, lumber companies,
2006 the economy was            marketing companies, architects
showing indicators that pointed       and of course mortgage
to a looming mortgage crisis that     companies. In a financial game of
would ultimately disrupt the flow     musical chairs it was the
of business in the secondary          mortgage companies who were the
market. Investors, who are            ones left standing.

essential to the flow of money,

The mortgage companies, fueled
basically ignored the warning         by their own greed and an economy
signs but began trading more          that demands the continuous flow
cautiously. What they ignored was     of goods and services, invented
the “perfect storm” as it relates     new ways to “move money” to a
to our secondary mortgage market.     larger segment of the public. As
The housing bubble burst,             competition between banks
sub-prime loans began adjusting,      escalated, new lending products
investors stopped trading, and        were invented to capture a larger
mortgage companies were left          share of this market until they
holding mortgages that were not       were basically handing out loans
worth what they paid for them.        to anyone that could fog a
A by-product of the housing boom      mirror. Banks, who had an endless
was an addiction to credit            supply of money via their
largely funded by the rising          investors on Wall Street, sold
equity in our homes. A large          the loans for a profit only to
portion of our economy was deeply     reload to do it again. The
invested in this boom. The chain      problem was that these loans were
of industries that profited from      ticking time-bombs with short
and helped propagate the boom is      fuses, each dependant on rising
endless: builders, real estate        house values.

brokers, investors, appraisers,

As we all know that ship has

sailed, leaving our economy in        be an ineffective and will have
shambles in its wake. The problem     to be revisited in the future by
that we are faced with is not         the judicial branch.

“who’s to blame”, but rather, who

2) Lobbyists – Legislators are
can fix it. The most obvious          supposed to be representing their
answer is our legislative group       constituents, meanwhile the
and the banking industry.             lobbyists are representing the
Unfortunately, those who would be     banking industry. Throw millions
involved with the recovery have       of dollars into the equation and
either a political agenda or are      a hand-full of representatives
just trying to stay afloat but it     that spell mortgage
is the public that’s suffering.       c-o-u-n-t-r-y-w-i-d-e and the
The writers at Lendfast.com, a        chances of getting real help for
nationwide home loan services         the “average Joe” is either
company, have come up with what       impossible or a long time
they feel are the three main          away.

reasons we can’t solve the

3) “Baby with the Bath-water”
current mortgage crisis:

– It is almost certain that a

1) Politics – In an election       bill will pass this year, and as
year, neither side is willing         mentioned earlier it will
concede a point of view that          probably be ineffective or an
could possibly allow the other        over-regulated nightmare. It is
side to claim victory in solving      politically convenient to punish
the crisis. The “haggling”            the “unscrupulous” lenders by
approach to passing legislation       enforcing regulations that sound
allows each side to claim victory     good on paper. However, like most
on the local news; however the        people, the extent of most
“local news” in an election year      legislators’ knowledge of the
is now the national news. If a        mortgage industry was learned at
bill is passed, it is likely to       the closing table. It is

pointless to pass regulations         id="authorbio"
that restrict banks from lending      class="membersnoticewhite">Aubrey
money to the very community           Clark is a syndicated writer and
they’re trying to help.

the managing editor for

America must solve this crisis     lendfast.com, a by holding our representatives in     href="http://www.lendfast.com">na
Washington accountable for their      tionwide home loan services
actions or lack of actions. There     company,and Direct Banc. His
is one advantage to the election      expertise ranges from mortgage
year, and that is we get to vote.     advocacy to helping people find
We can throw the “babies out with     good the bath-water” as well. If you       href="http://www.directbanc.com/a
want real change look past            verage_credit">credit cards for
Democrats or Republicans and vote     fair credit. He lives and
for the best candidate to help        works in Atlanta Georgia with his
you.

>About the children.