I do not and will not blame the govenment for the credit crisis and mortgage mess, per se.
What I do find fault with is the public airing of the naivety those in charge who either should know better or should get better information before making their statements to the press. Throwing money at the mess will not solve it either, so maybe we should stop trying. Understanding the problem and moving to help all those involved solve it should be the main thrust of our Government.
Before I give my two cents worth I must tell you that the mortgage mess is only partially the mortgage industry's problem and a great deal of the brokerage firms on Wall Streets problem. I cannot even come close to the problems they have created which helped attribute to the credit crunch and the mortgage mess. My concern is real estate and real estate financing.
One more caveat before I lay out my thoughts on the matter: blaming appraisers and brokers adds nothing to the solution and conveniently overlooks the lenders who could have stopped
the problem in it's tracks. Everything that is blamed upon the aforementioned groups fell within the pervue of the lenders ability to stop or at least review. The fact that they abdicated their position doesn't relieve them of their responsibility. As an example I heard one U.S. Senator complain that in selling the option arm the higher the margin, the longer the prepayment penalty, the greater the profit to the broker. Who set that formula up, the broker or the lender? Who could have stopped that on a moments notice, the broker or the lender? The answer to the first question is clearly the lender and second question as well.
Good brokers never subjected their clients to that loan or any of the detrimental consequences and so I agree that the brokers who did are equally at fault. The lender still could have stopped it, however, but greed apparently took over.
The main problem we face today is fear. The normal workings of the mortgage market have been haulted because the lenders cannot sell their bundled mortgages on Wall Street as the investors are not inclined to purchase them. One reason is their lack of faith in the quality of the mortgages and the other is they do not want to show their shareholders that they are buying these pools of loans. Here is where Ben Bernanke's (Federal Reserve Chairman) thoughts of giving the borrower 1/2 the equity so they have "skin in the game" and hoping this would replace foreclosures is a somewhat silly statement to make when investors are worrying about their capital. More on that later.
Roger Schlesinger's Mortgage Minute is heard on hundreds of radio stations and daily on the Hugh Hewitt radio show and Michael Medved shows. Roger interacts with his hosts and explores the complicated financial markets in order to enlighten his listeners and direct them along their own unique road to financial freedom.