Michelle Singletary
The Washington Post — What's needed is more criminal prosecution, not another commission with little power. After all, we're talking about loan officers responsible for explaining mortgage products with complicated terms and high fees — the types of products that led to the current economic mudslide.
When Treasury Secretary Henry M. Paulson released the government's blueprint for overhauling the nation's financial regulatory structure, he promised to direct more attention toward the front-line people who arrange mortgage loans.
"Simply put, that process was broken," Paulson said.
To protect consumers from predatory lending and deceptive disclosure practices, Paulson proposed the creation of a federal Mortgage Origination Commission that would establish minimum standards for loan officers. It would also evaluate, rate and report on each state's efforts to license and regulate these mortgage salespeople.
Sounds impressive, doesn't it?
But based on my investigation of one mortgage operation, which has continued to arrange loans despite state sanctions, what's needed is more criminal prosecution, not another commission with little power. After all, we're talking about loan officers responsible for explaining mortgage products, some of which have complicated terms and high fees, the types of products that have led this nation into its current economic mudslide.
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