I understand his premise. My point is that we all can't be experts in every field... I can't be an medical expert, a legal expert and a banking/financial expert. That's why I contend that when there is clear abuse, such as has gone on for the last several years in the mortgage lending industry, that we need someone to step in and slap their hands.
Let me tell you another example. A friend of mine is a mortgage broker, owns the company. He has been doing so for many years. It was of great dismay to him making loans for his clients because his clients kept hearing the ads on the radio about 3% loans, etc. They didn't understand the "catches"... negative am loans, balloon payments, etc. In one particular case he quoted a 6. something rate to a client who said "why can't you get me 3. whatever that I'm hearing on the radio". My friend, the mortgage broker, called the advertiser of that rate and ask for a rate based on his clients data. The advertiser came back with a rate exactly the same as my friend.
Another example, someone came to my friend the mortgage broker because their ARM loan was out of control and they wanted to refi into a fixed rate. They found out that they had a $20,000 prepayment penalty to get out of the loan that they didn't know about. How many people do you know are knowlegeable enough to know what a reasonable prepayment penalty amount or period is???
My point, again, is that there has been rampant misleading lending practices that has escalated over the last few years. Some oversight is needed.
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