Monday, March 24, 2008

What's a mortgage broker good for?

Today's Wall Street Journal had a editorial piece speaking out against treasury secretary Harry Paulson's suggestion that mortgage brokers need more regulation and licensing.
Regulation and licensing? How about boiling in oil and drawing and quartering? Brokers are unnecessary middlemen who skim a percentage of the deal, for doing little to nothing.
As a borrower, I don't what a middleman, offering self serving advice, and misrepresenting me to the lender. As a lender, I need to learn two things, am I lending more than the property is worth, and does the borrower make enough money to make the payments. If I get either answer wrong, I am going to loose money on the loan.
Only a fool would believe anything a broker would tell him. A wise lender will learn the answers him self, so he is sure the answers are correct.
So who needs a broker. And if you don't need a broker, why bother the license and regulate them?

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