ONE, CENTRAL MORTGAGE REGULATOR - Would That Have Prevented the Mortgage Meltdown!
SENIOR OFFICIALS IN OBAMA ADMINISTRATION SAID TO BE EYING CENTRALIZED MORTGAGE CONTROL!
Mortgage lending - it seems to have come full circle!
The very same big banks and financial institutions that gladly gave mortgage money to any prospective homebuyer with a pulse two years ago now seem to be doing whatever it take to scuttle loans! To stall settlement on short sales! To delay loan work-outs and modifications!
Now, as summarized in a Wall Street Journal story by Reporter Damian Paletta, the Obama Administration is considering giving only one federal agency the authority to monitor mortgages and other consumer-related financial instruments. This would be just one part of a broader rehab of U.S. Financial Regulation.
Today, oversight of mortgages and other financial products is divided between many state and federal entities - The Federal Reserve Board, The Federal Trade Commission, the SEC, and similarly-devised state authorities.
One scenario would strip The Fed of some of its mortgage regulatory power. The Federal Reserve Board was roundly criticized for failing to reign in aggressive mortgage lending practices during the recent housing boom.
President Obama has a high priority for overhauling financial market regulation. Timothy Geithner, U.S. Treasury Secretary, wants a new Federal Agency to monitor fiscal risks to the U.S. Economy, empowered to take action to manage those risks. Geithner has also asked to have the Federal Deposit Insurance Corporation (FDIC) granted broad powers to take over failing bank holding companies or broker-dealers.
Likely, such a major financial overhaul would be blended into one large piece of legislation, and come out of Congress before the end of the year, for the President's approval.
But would such a measure have prevented today's mortgage lending and housing crisis? And, even more importantly, will such massive restructure prevent such a meltdown from happening again!
Being honest, no one can be sure!
DEAN MOSS & DEAN'S TEAM CHICAGO
