I'm not one to side with industry lobbyists, but this guy does make a good point. And he's right, it is destroying the housing market. I posted on the previous article on this subject.

A close look at the HVCC will show that it turns over control of the loan process to the Banks removing it from the consumer and mortgage broker. It has put a lot of small businesses out of business. In the past when a borrower was turned down by one Bank their mortgage broker could take the appraisal and submit it to another bank. Now the consumer has to pay for another appraisal. Before anybody piles on mortgage brokers let me set a few things straight. Mortgage Brokers do not approve loans or establish loan programs. All they do is submit a loan to the lender. It is the lenders job to review and approve the loan. Also studies have shown that mortgage brokers deliver lower rates, lower closing costs and better service to than the banks. The purpose of the HVCC is to enrich the banks and put the small independent broker and appraiser out of business.

why don't you have the sentencing story up yet? you are a website for gods sake. should have the story by now.

150 years for Bernie Madoff - well deserved./

Ultimately, it's mostly the Bank's money at risk, and if that's the case why shouldn't they be allowed to be more in control? It's not like home buyers have no recourse. Paying an extra $250 for another appraisal should not be an undue expense? Or do what I did, pay more down. What happenned to conservative stewardship?

Personally I have great experiences working with Mortgage brokers. I have gotten great rates, and great service, but there's no question the interest of the mortgage broker is to get a transaction done. They hold no risk. They want to submit and get as many mortgages done as possible. That means they want appraisals that are high regardless of what the inherent risks may be.

Dear AskDong. It was the Banks who created the problem not the mortgage broker. Its true that mortgage brokers might lean on an appraiser to up the value but a bank loan officer can do the same thing (the loan officer doesn't bear the risk either).

As for Banks bearing the "risk" thanks to securitization this is not the case either.

If you have had a good experience with Mortgage Brokers then kiss that goodbye. This will put mortgage brokers out of business and leave you with the choice of a few very large banks. So when your fees are higher and your rates are higher you will only have yourself and the HVCC to thank.

Typical of a corporate propagandist.

"destroy the housing market"?

Oh, really? Destroy the simple ability of folks to buy and sell homes? Or...making it just a little harder, a little more expensive, adding one small step extra, just to avoid another financial market meltdown? Steps that were in place before they were abandoned in the eight-year crime spree under George W. Bush? The whines are sandpaper in my brain.

Fuck these people. Fuck 'em raw. I've HAD IT WITH THEM. They almost destroyed this country, MORE THAN ONCE, and we're cleaning up after them yet again.

"Now the consumer has to pay for another appraisal."

Sorry, pancho, but that is dead wrong. In the clusterfuck of trying to re-finance for the last six months, I've been offered 1) appraisal fees waived and 2) my FIRST appraisal being accepted by the second loan officer.

It's the beauty of the free market--finding legal ways to do business that go around these 'rules'. Oh, and corporatist Republicans bitching about the myth of red tape and strangulation of small businesses.

I have had a similar experience trying to refi my place, which I bought last year at 5.875 30YFR...first my credit union said the property had declined so much I would have to pay PMI, which made the whole exercise too expensive, and which I called BS on. A second appraiser found that the property had NOT declined that much, so we were good to go. But then the rates went up. So it doesn't make sense to refi at this point.

I'm not trying to cash out, and I plan on living at this place forever, but I was just trying to save some money, because God knows I won't be getting a raise any time soon in THIS economy. But I have been victimized - Yet Again - by Banks/Credit Unions, and their New Found Prudence in the Financial Market. Lord knows, they can't LEND ANY MONEY, because they're all so busy covering their losses at the gambling table....

Meanwhile I have to read about how Citigroup (and I'm sure the rest of the bankster criminal class) is paying their people MORE MONEY NOT TO LEAVE.

There's a growing body of literature that finds that brokered loans are more likely to go into default than loans originated some other way. In other words, brokers are associated with mortgages that have proven to be riskier. This doesn't mean that all brokered mortgages have difficulties, but suggests that there is something about the way brokers operate (the basis on which their fees are determined; the way they market their services) that may play a role in increasing the chances of default. And in most states, brokers are not well-regulated, nor do you need much training to hang up a mortgage broker shingle. In short, I won't lose sleep over legislation that limits the freedom of brokers to operate.

Appraisers have stated for years everyone tries to influence them. Banks, savings and loans, credit unions, lenders, brokers, realtors and the consumer. Why are just brokers barred from participating in the process? Because banks are in control.

Mortgage brokers are assumed to be the party least interested in an honest deal between lender and buyer, that's why.

In a distorted financial sector, where the natural responsibility of a lender to make sound decisions has been corrupted by the unlimited willingness of an uninvolved third party to repurchase any loan, no matter the terms, that logic of course ceases to apply.

But the idea that brokers (and for that matter realtors) are somehow being unfairly kept out of the process if they can't influence real estate appraisal is bald-facedly absurd.