Mortgage Financing

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The Wall Street Journal (no link, subscription required)today weighs in on a topic that obsessed us for a while here: the role of mortgage brokers in the current foreclosure crisis.

Nuggets: Brokers are involved in 58% of home loans, and about three-quarters of subprime loans; 32 states do not require people to pass a test to receive a mortgage-broker license. ‘As business surged,’ the Journal reports, ‘some brokers put borrowers into loans they didn’t understand, couldn’t afford or were otherwise ill-suited for....’

The Journal tracks the checkered career of Bay Area-broker Altaf Shaikh, who skipped from job to job and allegedly lied to so many borrowers that nine California counties ended up charging him with grand theft.

U.S. Sen. Chuck Schumer (D-N.Y.), a dangerous man if you are standing between him and a reporter, gets the ‘pull-quote,’ opining, ‘The mortgage brokers are the wild, wild West of mortgage finance. We need to bring a sheriff to town.’ (Any evidence Schumer cared in 2004-06, when the bad behavior was peaking? Just asking.)

Comments? Thoughts?
Photo Credit: Reuters