About the Author
Moe Bedard is a leading expert and trusted authority in regards to loan workouts and loan modifications. Moe is the founder and President of Loan Safe Solutions, LoanSafe.org and the main contributor to LoanWorkout.org. He has blogged on this subject more than any other person on earth and has personally been involved in over 300 loan workouts and mortgage audits.
Treasury Releases Blueprint for Stronger Regulatory Structure
March 31, 2008 hp-896
Washington- The U.S. Treasury Department today released its Blueprint for an improved financial regulatory structure, one that strengthens consumer protections, improves tools for market stability and enhances financial innovation. Treasury’s Blueprint for a Modernized Financial Regulatory Structure presents a series of short-, intermediate- and long-term recommendations for reform of the U.S. regulatory structure. The Blueprint, announced in June 2007, is a key part of Treasury Secretary Henry M. Paulson Jr.’s efforts to improve the competitiveness of the U.S. capital markets in the increasingly global marketplace.
“We should and can have a structure that is designed for the world we live in, one that is more flexible, one that can better adapt to change, one that will allow us to more effectively deal with inevitable market disruptions and one that will better protect investors and consumers,” said Secretary Paulson in remarks at the Treasury Department. “The challenge is to evolve to a more flexible, efficient and effective regulatory framework – and that is the purpose of this Blueprint.”
The short-term recommendations include improvements to regulatory coordination and oversight that regulators can make quickly. The Blueprint recommends creating a new federal commission for mortgage origination to protect consumers better. The report also recommends modernizing the President’s Working Group on Financial Markets and clarifying the Federal Reserve’s liquidity provisioning, as Secretary Paulson discussed last week.
The long-term recommendation is to create an entirely new regulatory structure using an objectives-based approach for optimal regulation. The structure will consist of a market stability regulator, a prudential regulator and a business conduct regulator with a focus on consumer protection.
The U.S. regulatory structure does not serve American as well as it could, and modernization is inevitable. It has been largely knit together over the last 75 years, put into place for particular reasons at different times and in response to circumstances that may no longer exist. The current U.S. regulatory framework for financial services providers includes:
- Five federal depository institution regulators in addition to state-based supervision.
- One federal securities regulator, additional state based supervision of securities firms, and self-regulatory organizations with broad regulatory powers.
- One federal futures regulator
- Insurance regulation that is almost wholly state-based, with 50+ regulators. This structure also has an international dimension that can be inefficient, costly and harmful to U.S. competitiveness.
These developments are pressuring the U.S. regulatory structure, exposing regulatory gaps and redundancies, and often encouraging market participants to do business in other jurisdictions with more effective regulation. As a result, the U.S. regulatory structure reflects an antiquated system struggling to keep pace with market developments, while facing increasing challenges to anticipate and prevent today’s financial crises.
Although Treasury began this effort a year ago, market conditions today provide a pertinent backdrop for this study’s release and highlight the need to examine the U.S. regulatory structure. Recent events have also reinforced the need to balance strong consumer protection and market stability on one hand, with capital markets competitiveness on the other.
For more information, visit http://www.treas.gov/offices/domestic-finance/regulatory-blueprint/.
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I can relate with this couple. I contacted WaMu in a proactive effort to get assistance during a hardship ... 
Did they change the terms of your loan to an arm? This is too risky
Apr 8th, 2008 at 3:45 pm
I cannot believe there are SO many surprised people out there! I lost many Realtor accounts to CW because no matter what, at the end of the day, CW was able to put their borrowers in homes. Granted those same people are now either back out on the street or, if they are lucky, in a rental. But hey! The REALTOR got THEIR check, right???? I mean, if I am a Realtor and I refer my borrower to CW and THEY say it will close, that means the borrower can afford it, right??? PLEASE! Everything is going back to the way it should be, V A N I L L A !!!!
Apr 8th, 2008 at 3:46 pm
I cannot believe there are SO many surprised people out there! I lost many Realtor accounts to CW because no matter what, at the end of the day, CW was able to put their borrowers in homes. Granted those same people are now either back out on the street or, if they are lucky, in a rental. But hey! The REALTOR got THEIR check, right???? I mean, if I am a Realtor and I refer my borrower to CW and THEY say it will close, that means the borrower can afford it, right??? PLEASE! Everything is going back to the way it should be, V A N I L L A !!!!
Apr 8th, 2008 at 3:58 pm
The problem wasn’t just CW either, it was with all lenders. All lenders used the same FNMA product a skirted the real reason it was around. Every major lender had access to this fannie product and sold it aggressively as a way for brokers to qualify their clients without documentation. Unfortunately it became a crutch for those who couldn’t qualify full doc and a way to skirt the typical “stated” rules and “hits.”
Apr 8th, 2008 at 4:33 pm
“easy pleasy”?….is that like “achy breaky”?
Apr 8th, 2008 at 5:19 pm
Im tired of all these people blaming the lenders, brokers etc. especially when they were the ones that benefited from the industry. Everyone benefited from the mortgage industry and now when the shit hits the fence they started to turn on each other. Freaken savages\’e2\’80\’a6 That makes me sick to the stomach; furthermore, we n don\’e2\’80\’99t need any more bad publicity about the industry. To all the dicks out there that crying about this and that… wake up and smell the coffee; Mortgage and real-estate was the only industry supporting our economy. Thinking about it, I don\’e2\’80\’99t we even export a god damn thing besides weapons; negative exports my friend. It\’e2\’80\’99s about recycling the money to fuel consumer spending. Just suck it up and take it like a man and let\’e2\’80\’99s move on. Negative news and publicity is killing our industry and to all you cry babies out there; if you\’e2\’80\’99re not going to say anything good about the mortgage industry ;then don\’e2\’80\’99t say anything at all. The only people to blame is the ones that open their god damn mouth and start cry about the industry . imagine if the damn analyst and news co didn\’e2\’80\’99t open their damn mouth about all this negative stuff. It would be business as usual and investors would be still buying on the secondary market instead of being scared to death because they read something from a desk jocky that had issues with his mortgage and now want to take down the industry.
Apr 8th, 2008 at 5:48 pm
CW wasted so much money, I was recruited to do wholesale sales commission only in 2004 and was given a Guarantee of 25k per month
for 4 months just to switch company’s. They never asked for any proof of my previous sales or the prior years W-2.
They just wanted to have more field coverage. They were a poorly run company for the top down and it does not surprise me they are circling the proverbial drain
Apr 8th, 2008 at 6:15 pm
About 150 imploded companies ago the mortgage industry meltdown was entertaining. Now it’s just boring because we know how it’s going to end. You’re all soon to be X mortgage industry people. Get over it
Apr 8th, 2008 at 7:55 pm
MARK, FOR $25K A MONTH FOR 4 MONTHS…I WILL KISS YOUR ASS EVEN IF YOU ARE THE DUMPEST PERSON ON EARTH!!!
Apr 8th, 2008 at 8:23 pm
MJ, When we went to HQ for training of the CW product, there was 20 other sales reps from around the US that got the same type of deals. This was standard with wholesale brokers and banks.
We were being recruited weekly by the likes of Lehman, WAMU, World, Downey, Wells, BofA, Bear, etc…. This industry is in for major changes we have not yet seen. Once things like this get uncovered the board of directors is going to want answers
By the way 100k for 120 days worth of work plus my commission if thats the “dumpest” (as you put it) person on earth then I’m glad I’m dump
Apr 8th, 2008 at 8:52 pm
Mark, you got it all wrong, I never say you are the dump or dumpest, I am glad that they pay you the money, I am sure you worth every penny of that $100k..I rather see you get pay than those GOP Executive at CW (Mozilo,Sambol, Gissinger and etc…)sorry for the misunderstanding!
Apr 8th, 2008 at 10:44 pm
Some of the people here are either stupid morons or liars. I have worked for Countrywide Wholesale for years in both sales and underwriting. There was a time years ago that if you got a clues accept and the income was reasonable, then yes the loan would close soon after. Never once did we have anybody tell us to not document the file or not question time on job or time self employed. You people and i use that word lightly, obviously couldn’t cut it and were forced out and now want to talk negatively about the largest lender out there. Realize that you dont belong in this business and go get the next job pumping gas somewhere or practice the following , “would you like paper or plastic?”
Apr 8th, 2008 at 11:13 pm
give me a break!!! Everyone is so quick to find fault with CW!
Countrywide is the nations’s largest lender, and when a giant walks thru the village,everyone throws stones. 97.3% of all mortgages are paid on time. The media has blown this out of proportion and the secondary market responded by not buying securities. Fast and Easy wasn’t the problem, the builders keep building new homes and the market is already saturated with new inventory, that can only bring prices down further.
the consumer looked upon his property as a source of income and most buyers in the last 5 years have put a second deed and milked equity out before the market started declining,then they belly ache about their loans. Nobody likes the paying back part of the loan process.
Apr 9th, 2008 at 5:59 am
THE MORTGAGE LOAN OFFICER, THE MORTGAGE BROKER, THE BANK, THE REALTOR….DOES THIS SOUND ALL TO FAMILIAR??? IT’S EVERYONES FAULT…BUT NOT THE CUSTOMER(s) WHO TOOK THE MONEY, PAID OF CREDIT CARDS, SPENT THE EXTRA…AND JUST PLAINED SCREWED THEMSELVES… YOU SEE ON THE NEWS, BIG BAD MORTGAGE COMPANIE FORCLOSING…POOR FAMILY LIVING ON 35K, JOINT INCOME…BUT LET ME ASK YOU..WHAT BUSINESS DID THEY HAVE TAKEN OUT A $300,000 LOAN…. NOW BLAME THE LOAN OFFICER, BECAUSE HE PUT THEM THROUGH STATED! BUT WHAT HAPPENNED TO ALL THAT MONEY THEY TOOK? PAID OF THIER CREDIT CARDS, SO THEY COULD GO RUN THEM UP AGAIN, BECAUSE THEY WERE LIVING WAY OUT OF THIER LIFESTYLE? AND THE FINAL STEP WAS RE-MORTGAGING THE HOUSE… BECAUSE IT WAS JUST A MATTER OF TIME, THEY WERE GOING BANKRUPT EITHER WAY?? YOU CAN GO TO ANY CAR LOT, WITH A 680 SCORE OR BETTER BUY A CAR, NEVER HAVE TO PROVE INCOME..BUT LET ME ASK YOU… DOES THAT MEAN I CAN GO BUY A MERCEDES S65 FOR $185,000, JUST BECAUSE THEY WILL LET ME DRIVE IT OFF THE LOT?? THIS IS NOT KNEW FOLKS…ALL THE WEAKMINDED, SELFISH, GREEDY PEOPLE HAVE DONE THIS FOR MANY YEARS, TAKE ALL YOU CAN GET IN LIFE, THEN CRY FOUL..”NOT MY FAULT!” “YOU SHOULD HAVE KNOWN I WAS WEAK!” SOUNDS JUST LIKE YOUR DRUG ADDICTS… THESE PEOPLE WHO BORROWED AGAISNT THIER HOUSE, KNEW THEY COULDNT PAY IT BACK…BUT THEY TOOK THE LOAN ANYWAY…SOUNDS LIKE THE REAL VICTIM IS THE MORTGAGE COMPANIES…THEY LENT WITH AN AGREEMENT, THE BORROWERS TOOK, WITH NO REAL COMMITMENT!!!!!
BEL….
Apr 9th, 2008 at 8:43 am
I HAVE TO SAY I AGREEE WITH BRIAN ON ALL ACCOUNTS , WE AS A NATION JUST LIVE OVER OUR HEADS
Apr 9th, 2008 at 11:15 am
I totally agree! I also think there are those out there who CAN afford the payments, but choose to walk away from properties they’re upside down on due to values going down. Especially if the property was NOO (investment) or 2nd home. This happened in California in the early 1990’s. I really don’t have much sympathy for people who borrow money, don’t read what they’re signing and don’t pay back what they owe.
I’m sure there are those who understood what they were signing and lost their job or had some type of financial hardship. If there’s going to be any kind of bail out (with OUR taxpayer money), there sure as hell better be some auditing of each and every situation before a dime is given to help homeowners out!!!
Apr 9th, 2008 at 11:31 am
Fast & Easy was never as described by the morons above. The real people that know Fast & Easy know that it was a high quality credit program that required more than just signing your name. It required 2 yrs on the job or self employment and was never that easy to get 95% through. Although, CW wholesale was reported to be the lowest quality loans of the 4 divsions of Countrywide, the quality is still very high. And, as Brian mentioned, everyone always wants to live above their means, get something for nothing and never accept the blame for mistakes.
Apr 9th, 2008 at 1:41 pm
I agree with Brian, everybody is crying now because they were living of increasing value of their home( ex. California, Florida, Nevada),now there is no more value and they can’t afford the property just like they couldn’t when the first got it. I’m a loan officer and I can’t tell you how many customers that I’ve seen refinance without any assets or sufficient income. They would refinance every six months and think it was alright. To be honest the pay option arms is what finally put the industry under, borowers could qualify full doc under the lowest payment and not the fully amortized payment and even go stated wit a 620. Some of the fault is on the btrokers, lenders, appraisers, etc, but also blame the consumers who were living well over there means now they are crying because they are losing a house they never could afford. And as far as builders they saw dollar signs in Florida peopel were buying condo and home sight unseen and in most cases not even built yet. I will be glad when the people who are not supposed to be in this business get out and borrowers who can’t afford these properties realize that they can’t live off of the equity in their homes.
Apr 9th, 2008 at 4:05 pm
There is absolutely no value in pointing fingers, this is capitalism at its best, there was an opportunity & people took advantage of it, it happens all the time, history is full of examples and it will happen again. We as people have short memories.
Unfortunately there are always a few bad apples & they give everyone a black eye, majority of us are good hard working & honest people and had no malicious intent. Unfortunately we as a society are not very far sighted, in fact we are programmed to think now, think short term.
All the signs were there, bloated inventory of homes,since when did property values go up forever and the list goes on & on.
I think we would be better served on trying to collectively focus on a solution, there are hundreds of thousands of people in dire conditions, not just those that have lost homes, but also people that have lost jobs, businesses that have been adversely impacted due to the housing & credit meltdown, retirees that are having to come back to the workforce - I wish I had the answers??
Apr 15th, 2008 at 7:50 am
Lots of truth from CW mortgage people is coming forth and the reason is they worked for the greediest CEO out there. Mozillo would have run the company with just him and a secretary if he could have pulled that off! Every year the mantra would be “how can we get more out of fewer people for less money!”
But, if you really want to get worked up about the sleeze in the business, try this: Builders who are in line for a tax break from Congress! They built the houses, owned the title company, had their own mortgage companies and appraisers and cooked the books on the entire process. Now they are going to get a tax break? Give me a break! Write your Congressman and tell them “No tax breaks for builders!”
Apr 30th, 2008 at 2:29 pm
I have been a realtor for 21 years, and I feel that not only the mortgage companies were at fault but the appraisers and some realtors. I never suggested a sub prime loan to anyone knowing how they work. I usually suggested to my clients that they live within their means, to think ahead that what happens if one of them became in a situation that they cant work.
Because of this is why I feel I have a strong referral base. In the 21 years I have been a realtor and the 2000 or so homes I sold maybe 1% have gone to foreclosure.
This year has been slow but I am still doing ok and sleep well at night knowing I never directed anyone to a sub prime loan. If I had a client that was pre-approved with a sub prime lender I would ask them to speak to another loan officer I have worked with most of my career. I would suggest fha loans to clients.
103% financing, negative amortization loans, no doc loans (also known as liar loans) are what caused all this. The builders having their own mortgage company (which I feel should be illegal and borders on a respa violation) pushing their appraisers to give value on anything that sold. Too many newer realtors in the business working part time to just get a few extra bucks.
Mortgage companies pushed these loans you see the ditech commercials 1% financing but the buyer doesnt realize its just for a month. The buyer goes to closing and at that point it is explained and what options do they have. Buyers have to educate themselves on financing. Purchasing anything you can not afford makes no sense. I could of made a lot more money during the housing boom if I had pushed these loans on people, but now they are coming to me looking for a home, so it will work out in the end for most of them.
May 10th, 2008 at 11:32 am
If people would educate themselves before they signed on the dotted line I dont think there would be as many people “out in the streets or renting” as you say. People should have enough common since to know what they are signing up for. The adjustable rate mortgage is something to be reconed with. I understand things happen in life however, the home retention department cannot help people if they are not willing to put some effort into it. Everyone has to make an effort to come together and make it work. Assistance cannot just be handed to you, I understand there are situations beyond your control. Countrywide is not the problem its the investors that are not able to assist countrywide. Education is Key in the mortgage business.