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Whose Fault Is This?
While the drop in income has hurt, Seay sounds just as upset by the vitriol she reads in news accounts and on blogs, which seem to blame everyone associated with the mortgage industry for this mess. "A lot of us are being stereotyped as crooks, but some of us still wake up in the morning and truly enjoy helping people," Seay says. "I, personally, never went into this business because I thought I could make a million dollars." Unlike some of the big lenders making headlines, Seay's employers did little business in subprime loans, mostly lending money to folks with average credit scores.
Make no mistake: there are plenty of folks besides Mozilo who made big money in recent years. Consider Mortgage Master Inc., the Massachusetts-based mortgage broker that I've used when buying and refinancing my home. According to a 2003 Wall Street Journal story on the firm, five Mortgage Master brokers earned more than a million dollars a year at the height of the boom, and no broker who worked the entire year earned less than $100,000. "These days [mortgage] brokers are racking up fees that rival Wall Street's 1990s windfalls," reported the Journal's John Hechinger, whose story introduced readers to a former truck driver who was pulling in $470,000 a year by answering his phone and filling in mortgage applications for people like me who wanted to refinance.
Seay missed out on those windfalls partly because she didn't want to move into a commissions-only sales position. She expresses no regret over that decision. She also realizes many mortgage professionals have it far worse than she does—at least she found a new job. Still, she thinks the public should show a bit more sympathy.
"There are a lot of us out here who have suffered financially, [and] we're not all crooks … Some of us are really good people who were trying to make a living," says Seay, who still gets a small thrill helping first-time homebuyers attain their piece of the American dream. Even amid finger-pointing and negative headlines, Seay says she can still look in the mirror in the morning and know that she made a positive difference for people trying to buy a home.
It's a sentiment worth keeping in mind as the bright lights of a congressional hearing room shine on Angelo Mozilo next week.
Daniel McGinn is a national correspondent at NEWSWEEK and the author of "House Lust: America's Obsession With Our Homes," published this month by Currency/Doubleday. For more information, click here .
© 2008
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Member Comments
Posted By: pduncan2000 @ 03/13/2008 1:02:27 PM
Comment: A few Broker's were were parlt reposible for the qualifying of certain borrowers., But the biggest responsible party was the wholesale lender that was offering terms with high debt ratios allowed, up to 60% or more of your total gross income for a house payment, before you even pay your taxes, groceries, utilities and insurance and clothing. The lender wouldalso allow the waiving of monthly escrow to collect the property tax payment every month. And then comes along the rate adjustment period 24 months after the loan began. It is always a 1 percentage point increase in your rate, which will drive your payments up by as much as 30%. And it doesn't stop there. The rate then increases by another 1% every six months until it hits usually 12%.
Now at the start of the loan they had a rate of say 6.5%, then, two years later it goes to 7% then six months later to 8% then six months later it goes to 9%, etc. Can you see that the problem is the loan product, not the borrower. He can't keep up with those increase in interest rates. Am I making sense here? Then you also have to pay your property taxes at the end of the year on top of being cash poor already. The system was rigged to fail from the beginning. But the secondary market could sell these potentially profitable loan packages in blocks of $5M-$10M bundles to unsuspecting buyers because for great sums of money on wall street because of the illusion of safety in U.S. Mortgages. Why not feel safe. U.S. Mortgages have been historically safe for generations. because of regulated policies that forbod them to sell such shoddy high risk ventures. Blame Wall St. and trhe greedy lightly regulated (FREE-MARKET) Banks.
Pat in Plano, TX
Former Mortgage Broker
Posted By: pduncan2000 @ 03/13/2008 1:02:08 PM
Comment: A few Broker's were were parlt reposible for the qualifying of certain borrowers., But the biggest responsible party was the wholesale lender that was offering terms with high debt ratios allowed, up to 60% or more of your total gross income for a house payment, before you even pay your taxes, groceries, utilities and insurance and clothing. The lender wouldalso allow the waiving of monthly escrow to collect the property tax payment every month. And then comes along the rate adjustment period 24 months after the loan began. It is always a 1 percentage point increase in your rate, which will drive your payments up by as much as 30%. And it doesn't stop there. The rate then increases by another 1% every six months until it hits usually 12%.
Now at the start of the loan they had a rate of say 6.5%, then, two years later it goes to 7% then six months later to 8% then six months later it goes to 9%, etc. Can you see that the problem is the loan product, not the borrower. He can't keep up with those increase in interest rates. Am I making sense here? Then you also have to pay your property taxes at the end of the year on top of being cash poor already. The system was rigged to fail from the beginning. But the secondary market could sell these potentially profitable loan packages in blocks of $5M-$10M bundles to unsuspecting buyers because for great sums of money on wall street because of the illusion of safety in U.S. Mortgages. Why not feel safe. U.S. Mortgages have been historically safe for generations. because of regulated policies that forbod them to sell such shoddy high risk ventures. Blame Wall St. and trhe greedy lightly regulated (FREE-MARKET) Banks.
Pat in Plano, TX
Former Mortgage Broker
Posted By: pduncan2000 @ 03/13/2008 1:00:07 PM
Comment: A few Broker's were were parlt reposible for the qualifying of certain borrowers., But the biggest responsible party was the wholesale lender that was offering terms with high debt ratios allowed, up to 60% or more of your total gross income for a house payment, before you even pay your taxes, groceries, utilities and insurance and clothing. The lender wouldalso allow the waiving of monthly escrow to collect the property tax payment every month. And then comes along the rate adjustment period 24 months after the loan began. It is always a 1 percentage point increase in your rate, which will drive your payments up by as much as 30%. And it doesn't stop there. The rate then increases by another 1% every six months until it hits usually 12%.
Now at the start of the loan they had a rate of say 6.5%, then, two years later it goes to 7% then six months later to 8% then six months later it goes to 9%, etc. Can you see that the problem is the loan product, not the borrower. He can't keep up with those increase in interest rates. Am I making sense here? Then you also have to pay your property taxes at the end of the year on top of being cash poor already. The system was rigged to fail from the beginning. But the secondary market could sell these potentially profitable loan packages in blocks of $5M-$10M bundles to unsuspecting buyers because for great sums of money on wall street because of the illusion of safety in U.S. Mortgages. Why not feel safe. U.S. Mortgages have been historically safe for generations. because of regulated policies that forbod them to sell such shoddy high risk ventures. Blame Wall St. and trhe greedy lightly regulated (FREE-MARKET) Banks.
Pat in Plano, TX
Former Mortgage Broker