I was reminiscing about party I went to a few years ago where I found myself talking to a very nice woman about a mortgage deal she was involved in at the time. She said in no uncertain terms that she was ready to cancel the loan because her mortgage guy was, and I quote, “slimy”. As a local mortgage banker in Sacramento, I have been fighting this stigma for years.
My hope was The SAFE Act of 2008, that went into effect this year to protect borrowers from those slimy unscrupulous and poorly trained lenders, would have some real teeth. To comply with this act and continue as a lender I had to shell out almost $1000 for required classes, state and federal testing, a background check, credit check and even had to submit my fingerprints. I was shocked to find that my friends over in the big banks (your Wells Fargo and BofA types) were exempt from this requirement. Say What?
They do the same work that I do, but because I work for a local mortgage bank and they work for a federal banking agency they are exempt. The only reason I can think of – Lobbyist. Now don’t get me wrong, I think there are some good lobbyist that do good work, but I am sorry these guys don’t belong in that category. Our reflexive move forward to attack this problem is forced once again to take two steps back because we have no power against this very influential group of lobbyist.
The silver lining, if you can really call it that, is these folks won’t be working in my office. Anyone that can’t pass the background check or is too stupid to pass the state and federal testing have nothing to fear. They can go knock on Wells Fargo’s door with their big database of clients and keep doing what they are doing. This is not to say everyone that works for the big bank is a crook, but to point out the complete hypocrisy built into this major reform.
Getting back to that party I mentioned earlier, I found myself the center of attention as a group of people gathered around me to share in a kumbaya of mortgage and real estate horror stories. As we drowned in our self-pity a young man in the group who had never owned a piece of property told us he thought it was truly a blessing – a wake up call for our society that had been drunk on spending and borrowing. It was all about consumption and we were as glutinous as they come. We were drunk on it! We were as the old saying goes, finally reaping what we sow.
When the economy started its rapid decent in late 2007, the Great Recession as it has been coined, was the mother of all wakeup calls – A gargantuan uncoiling of all that drunk, unregulated, unfettered consumption. Maybe that young man at the party was right. This was the kick in the mouth we needed to prepare ourselves for the next cycle of boom and doom that I am sure we are bound to repeat. Again and again.