FireDream

Who Should We Blame for the Mortgage Industry’s Problems?

Don’t you think it’s fascinating that some members of Congress are doing their darndest to drag down the mortgage industry-when in fact, they may have benefited from some of the “wrongdoing”?

Senator Dodd (D-Connecticut) is the chairman of the Senate Banking Committee, and has been at the forefront of those calling for the government “rescue” of foreclosed properties through Fannie Mae, Freddie Mac and a host of government agencies.  He’s been known to do some pretty heavy name calling-even going so far as to claim that the housing crisis is the major reason for the economic problems here in the U.S.

But here’s what’s interesting: Mr. Dodd apparently took advantage of some “VIP” rates offered by one of the nation’s largest lenders.  According to published reports, in 2003 he received interest rates well under 5 percent for nearly three-quarters of a million dollars in mortgage loans on two of his properties.  Rates that were not available to the average borrower.  Apparently, on two of his properties.  Apparently, Mr. Dodd didn’t seem to be concerned with the industry’s practices when he got his mortgages.

Don’t get me wrong.  Some of the big boys in lending didn’t play fair and certainly made some bad lending decisions.  But pinning the country’s economic swing on one industry?  I don’t think so.  And what’s terrifying is that some have actually suggested that the mortgage industry should essentially be socialized.

And before you start thinking that I’m picking on one side, think again.  Folks from both sides of the aisle are pointing fingers the same direction, making all sorts of speeches and going through machinations designed to deflect any criticism that (gasp) maybe Congress has made a few bad decisions here and there in the way that it’s done its own business.

Come on folks, let’s get real for a minute.  Congress wasn’t complaining when the market was booming and when property values were skyrocketing.  Surely they had to know that it couldn’t last forever.  Economists were shouting from the rooftops about the housing bubble for years before it burst in the very states that got the most benefit from it (California, Florida, Arizona, etc).  And it wasn’t as legislators just arrived in Washington when the bubble burst.  Between his stints in the House and the Senate, Dodd has been in Congress for 34 years.  Senate Banking Committee Chuck Schumer (D-NY), who has also been quite vocal, has been in Congress for 28 years.

Maybe I’m the only one who believes this (I don’t think I am), but I happen to believe that the economy will correct itself.  If there’s been fraud, if there’s been corporate wrongdoing-prosecute those responsible and hold them accountable if they’re proven guilty.  But otherwise, let our free market work the way that it has for nearly 250 years.  It may be a bumpy ride, but we’ll get there when we need to go…and the market will be all the better for it.

This blog is intended for informational/entertainment purposes only and is not meant to provide any financial or legal advice.