{"id":9794,"date":"2009-09-19T05:59:37","date_gmt":"2009-09-19T12:59:37","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=9794"},"modified":"2009-09-19T06:14:16","modified_gmt":"2009-09-19T13:14:16","slug":"eliminate-the-government-option-for-a-healthy-mortgage-industry","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/9794\/eliminate-the-government-option-for-a-healthy-mortgage-industry\/","title":{"rendered":"Eliminate the Government Option For a Healthy Mortgage Industry"},"content":{"rendered":"

Most loan originators are grateful for the “government option” in the mortgage markets because of the liquidity crunch. I submit that the reason for the mortgage liquidity crunch was TOO much government involvement in housing and its increased involvement has ruined mortgage banking. That’s going to be a hard concept to grasp because all of us have relied on the government, at one time or another, to insure the mortgage loans we make. Lend me your mind for a few minutes and consider what might have been had we weaned ourselves off of the milky government teat for a free market approach to residential real estate loans.<\/p>\n

Government lending didn’t really start until the 1920s with farm and home loans. FDR’s New Deal supercharged the idea of US government-backed home loans<\/a> as a “band-aid” to the Depression-era liquidity crisis. Poorly-trained, high school social studies teachers taught us that the New Deal policies are what saved the American economy. In fact, evidence suggests Federal intervention ultimately prolonged the Depression<\/a>, curbed creativity and innovation in lending, and turned the residential lending industry into a ward of the Government.<\/p>\n

Twice, in recent history, did residential lending attempt to divorce itself from this dependent relationship…twice, we failed.<\/strong> Current legislators use these failures as evidence for why free market capitalism is “dangerous” when left unchecked<\/a>. In reality, the de-regulatory efforts towards banking in the 1980s, and securitized real estate lending in the earlier part of this decade, were constrained by a government-provided safety net (FSLIC insurance and expansion of the GSE mortgage conduits<\/em>) akin to bad parenting.<\/p>\n

Consider the teenager. Adolescence is the awkward period between a child’s dependence on his parents and the independence from those parents that comes with adulthood. Responsible parenting dictates that greater responsibilities be given, as the adolescent ages. Responsible parenting rewards the adolescent for good choices and levies punitive restrictions as consequences for poor choices. It is when parents indulge the adolescent in freedom without responsibility that adolescence continues to the child’s middle-age years. \u00a0\u00a0 In short, if Biff kills his girlfriend in a Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Most loan originators are grateful for the “government option” in the mortgage markets because of the liquidity crunch. I submit that the reason for the mortgage liquidity crunch was TOO much government involvement in housing and its increased involvement has ruined mortgage banking. That’s going to be a hard concept to grasp because all of […]<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[26,5],"tags":[],"class_list":{"0":"post-9794","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-lending","7":"category-real-estate","9":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":4812,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4812\/other-types-of-credit-may-be-feeling-the-crunch-but-home-mortgages-are-still-readily-available\/","url_meta":{"origin":9794,"position":0},"title":"Other types of credit may be feeling the crunch, but home mortgages are still readily available","author":"Greg Swann","date":"October 4, 2008","format":false,"excerpt":"This is my column for this week from the Arizona Republic (permanent link). \u00a0Other types of credit may be feeling the crunch, but home mortgages are still readily available Bad news about the economy is coming in from all directions, so you may be in the mood for some good\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2002,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2002\/the-mortgage-liquidity-crisis-is-over\/","url_meta":{"origin":9794,"position":1},"title":"The Mortgage Liquidity Crisis Is Over","author":"Brian Brady","date":"October 3, 2007","format":false,"excerpt":"The liquidity crisis in the mortgage industry is over. I don't mean that we are going back to the lending guidelines of the go-go years of 2003-2006 but the non-conforming loan guidelines are coming back to a sense of normalcy. Dan Green talked about the non-conforming home loan market being\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1787,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1787\/its-a-lenders-market\/","url_meta":{"origin":9794,"position":2},"title":"It’s A Lenders’ Market","author":"Brian Brady","date":"August 12, 2007","format":false,"excerpt":"I pulled a Cramer today. The pressure has been mounting for some time, now. Roberta Lee, a real estate broker in Norco, CA left a comment on an article I wrote on Active Rain: My son is in the mortgage industry. He took the time..... :) to enlighten me.....\"Mom this\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2272,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2272\/countrywide-bankruptcy-likely-not-while-the-feds-are-bailing-them-out\/","url_meta":{"origin":9794,"position":3},"title":"Countrywide Bankruptcy Likely? Not While the Feds Are Bailing Them Out","author":"Brian Brady","date":"November 27, 2007","format":false,"excerpt":"I'm a Countrywide watcher. It's size and reach in mortgage loan origination is worthy of any mortgage originator's respect and admiration. I had a lot of confidence in Countrywide as it marched to becoming America's largest originator of home loans. I liked 'em so much that I had a piece\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":12901,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/12901\/that-giant-slurping-sound-is-the-mortgage-market-drying-up\/","url_meta":{"origin":9794,"position":4},"title":"That Giant Slurping Sound is the Mortgage Market Drying Up","author":"Brian Brady","date":"August 10, 2010","format":false,"excerpt":"Ken Montville asked the nagging question about the future of the mortgage market: Unfortunately, even Congress \u2014 that bastion of liberalism and home of the bailout \u2014 is tiring of pouring good money after bad into the two mortgage giants that have been sucking up all the mortgages \u2014 good\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1667,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1667\/the-800-pound-gorilla-in-the-corner-the-meltdown-of-the-wall-street-mortgage-market\/","url_meta":{"origin":9794,"position":5},"title":"The 800 pound gorilla in the corner – the meltdown of the Wall Street mortgage market","author":"Morgan Brown","date":"July 16, 2007","format":false,"excerpt":"As we go about our daily lives in the mortgage and real estate world; dutifully performing our job functions and taking the high road of customer enlightenment via blogs such as Bloodhound; we are faced with a very large gorilla looming in the corner of our workplace. That gorilla is\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/9794","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=9794"}],"version-history":[{"count":7,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/9794\/revisions"}],"predecessor-version":[{"id":9801,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/9794\/revisions\/9801"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=9794"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=9794"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=9794"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}