There are many really sorry tales coming to light about the subprime mortgage business. Lots of folks richly rewarded for originating billions of dollars in subprime mortgages using some “questionable” practices. There are several references to major financial institutions in this article. Seems that every financial institution had a finger in the pie, but somehow, all the government regulation and oversight doesn’t hold anyone accountable or responsible. Amazing…
Subprime Fiasco Exposes Manipulation by Mortgage Brokerages
mortgage brokers and independent sales outfits are overseen by a menagerie of state authorities, some of which also look after barbers and masseuses.
In California, which accounts for about 40 percent of subprime borrowing in the U.S., no one even knows how many people are originating loans, according to an October 2006 report by the California Association of Mortgage Brokers. That’s because while the state licenses individual mortgage brokers, anyone can work for a big lender under the umbrella of a single corporate license. The group estimated that a minimum of 600,000 people were peddling loans in the state last year.
What is so remarkable is the number of people involved. What happens to all of them when this falls apart? Yes, they can ditch the car, get unemployment and move in with the girlfriend to live rent free for a while. But then what?