What is happening in Washington with the mortgage market is unimaginable. We are having the politicos, the nations bankers and some of the heads of the lending institutions figuring out the problem with the mortgage market and writing the prescription for recovery. Let me show you how this could work in the real world. I graduated from two top schools with a B.A. in Economics and an M.B.A. in Finance. I was active in all types of sports, so would you like me to diagnose and prescribe a cure for your tennis elbow, sore back or the knee that doesn't cooperate any more? I don't think so even though I have good credentials. When we have had the pilots strike on an airline should we just send in management to take over flying? Seems a bit ridiculous! How about we as a nation give incentives to people to buy a Hummer automobile as their sales are way down? Naw, that doesn't seem too wise either.
Then why are we having people who do not know how our industry works trouble shoot and decide what should be done to put it back on the right track? The main thing wrong with the industry was the excesses that led to all kinds of problems. Before we diagnose what caused those excesses we have a chicken and egg problem to solve. Was the housing boom caused by the mortgage industry, Wall Street, the Federal Reserve, the building industry, the press or Santa Claus? (I put Santa on the list to try to throw you off).
If you ask John Q. Citizen they won't even hesitate before telling you that my industry, the mortgage industry, gave loans to anyone who wanted one and never even checked anything but the "fog on the mirror" test. As bad as the housing problem is, and it is bad, we still have over 90% of the homeowners in America making their payments and remaining in their homes. In my opinion it was each one of the above that caused the problems all of which could have been partially avoided if they had fulfilled the main part of their job which would be regulating their turf. But they didn't because everyone had something to gain by the housing boom.
Roger Schlesinger
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.
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