Housing Comes First

Mortgage Brokers, Predatory Parasites.

The New York Times article "With Mortgages, Instant Wealth for Middlemen" begins to cast a light on the little pissants that start the predatory lending cycle of pain--mortgage brokers.

The problem is that the article is schizophrenic, at times lionizing these capitalist assholes as "scrappy entrepreneurs", then pointing out the predatory lending that is the heart of their business.

The money quote:

"Like real estate agents, mortgage brokers are paid a percentage of the total transaction, about 1.5 percent on standard 30-year loans and up to 3 percent or more on less creditworthy loans that require more labor, according to Mr. Olson, the consultant. More often than not, the fee comes from the lender instead of the borrower. It is an arrangement with a built-in conflict of interest. . . a broker who steers a borrower to a more expensive loan can snag a bigger fee for himself."

The focus of the article, the owner of one of these loan shark firms in Illinois has an hour-long radio show every week. One epidode covered by the article relates his advice to a credit-card burdened homeowner: refinance out of a 30-year fixed mortgage and into an adjustable rate mortgage paying interest only for now.


THESE GUYS ARE THE ENEMY!

posted by Phil @ 9:54 AM