Are All Bankers Created Equal?

By Moe Bedard

Not all bankers are created equally. Or are they? The President of the Mortgage Bankers Association gave testimony before a congressional subcommittee today explaining what he thinks Congress should do about widespread fraud and the means to improve lending conditions in the United States.

His plan includes the following:

#1 Borrowers should immediately communicate with their services as soon as they feel they are approaching mortgage related distress.

#2 Borrowers should utilize HUD approved counselors and HOPE NOW in their efforts to obtain legitimate loan modification services.

#3 Washington should provide more funds to the FBI and the Justice Department to prosecute fraud.

#4 More consumer awareness programs should be implemented by the FTC.

While all of these suggestions seem good and fine, I was displeased with the lack of commentary from the President of the Mortgage Bankers Association on regulations to avoid predatory lending in particular. It seems to me that the testimony was focused merely on loan modification fraud and what the government should do about it.

As for the suggestions supplied by the President of the MBA, I can’t say that I entirely agree. As to suggestion one, I think the President of the MBA and Congress will have a difficult time convincing borrowers that their servicers are going to offer real help. Most borrowers perceive services as uncaring organizations, that is, when borrowers are able to get them on the phone. As for point two, the President completely left off the table that borrowers could utilize the assistance of qualified lawyers versed in real estate and mortgage law. I can understand his perspective though; why would he want to encourage lawsuits? The last two suggestions just seem like politically correct placeholders to me. Of course more consumer awareness programs should be implemented and of course the FBI and the Justice Department should increase their efforts to stem mortgage fraud…but does this really require more taxpayer money?

All in all I think that all bankers are created equally and the President of the Mortgage Bankers Association’s testimony is proof positive that he is just looking out for his powerful lobby. This was a protectionist speech that really had no original direction or any acceptance of blame for the ongoing real estate and mortgage tragedy in the United States.

Read the entire testimony at Real Estate Rama:

Tagged as: Congress, fraud, mortgage bankers, mortgage bankers association, united states