Wednesday Morning: Why Brokers Love to Sell Option ARMs

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Good Morning. I know it’s a shock, but mortgage brokers are in it for the money -- which is not necessarily the same thing as shopping around for the best mortgage for you.

EFinance reports they are ‘Unlicensed, Unregulated, and Out of Control’: Story quotes one broker saying, ‘Option ARMs are not a license to steal, but once a customer asks for it, I know I’m going to make four times as much. It’s what puts me down here at Best Buy buying a 40-inch flat screen.’

The San Francisco Examiner reports that regulators in Arizona are cracking down on escrow fraud schemes. Why aren’t we reading about fraud crackdowns in the mortgage business in Southern California? Is it possible this is a fraud-free zone? I’d like to hear thoughts on that one.

Thanks to the early-rising Patrick.net for these eye-openers.