Sen. Obama introduced legislation targeting fraud and predatory lending. Sen. Clinton wants to focus on lenders who abuse unknowing clients. Former Sen. Edwards wants to ban fees and establish new licensing standards.
Each have different approaches, but know that changes in the industry are important, and necessary. Before they could even air their opinions, the mortgage industry spoke, being protective of their industry and jobs. Mortgage brokers are bearing the brunt of blame for the subprime mortgage fallout, but it’s important to realize that the secondary market (Wall Street) controls the demand for mortgages offered to the public. Banks sell mortgages to Wall Street, in a secondary market. If they decide to stop buying certain loans, those loans will likely disappear from the market.
When the media takes on an issue, it drives the industry to react. With the constant reporting on the “market fallout”, banks, lenders and brokers are all forced to deal with making changes to get the market back in neutral territory.
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