As I was thinking about this blog post, I couldn't help but think about todays' headline concerning the FED loaning 85 billion dollars to bailout AIG. What an astronomical number! I then thought about all the bad press the mortgage industry has endured this last year. Bad subprime loans was supposedly the reason the financial markets have crashed, and why the ensueing foreclosures, due to these "bad" loans, have caused real estate to go South. Yet AIG is primarily an insurance company. Sure they have some subprime exposure, as most financial behemoths do, but in this case foreclosures and bad loans are not the chief culprit.
Could it be that rather than bad apples in the mortgage industry, these huge financial behemoths are responsible for the financial and real estate crisis in America? I find it comical that when a bad attorney surfaces in the legal world, society accepts them as a bad apple. No one is about to question the "integrity" of the United States legal system. So most attorneys are respected, and the bad apple does not reflect the bunch. But in the mortgage world, those bad apples, that put people into Subprime products, that could have qualified FHA or Conventional, have been reflected onto the entire mortgage industry.
I can certainly understand the consumers frustration, with "shady" loan officers. There's no question that the number of unlicensed mortgage professionals, originating home loans over the last 4 years, was greater than the entire industry combined prior to it. However this AIG debacle, should give us, legitimate, hard working mortgage professionals the dignity we deserve.
I feel like it was the same financial behemoths responsible for the current financial crisis, that created the subprime crisis. It was not a bad apple loan officer in Buford, Illinois, that created a 90% loan to value with a 500 credit score lending guideline. The financial institutions did. These entities decided to lend funds with ridiculously low lending standards, that would no doubt be exploited by incompetent loan originators. They wanted to increase production, and please the stock holder. They sacrificed long term profitability for short term returns. Now after years of unsound lending guidelines, it's the mortgage industry that's responsible for the financial collapse of America?
Whether it was mortgages, insurance, or any other financial instrument that was led into the ground by these mega-financial entities, it's time they accept their responsibility for what they've done. Who do you feel is responsible?