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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