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When the Obama Administration put forth a package of proposed financial reforms a few years back, one of their suggestions was that every mortgage lender would
by sethg 15y ago
When the Obama Administration put forth a package of proposed financial reforms a few years back, one of their suggestions was that every mortgage lender would be required to make its most prominent offering a “plain vanilla” mortgage that amortized in 30 years and had a simple fee structure. Needless to say, this requirement did not make it into the final law.
- spanktheuser 15y agoSadly, the mortgage industry has reached an equilibrium such that some level of consumer abuse is, practically speaking, necessary to compete. No one has successfully disrupted this market, because it requires simultaneous technical, product and policy change on the part of brokers, federally-guaranteed agencies like Fannie/Freddie/HUD, lenders, mortgage insurers and title companies. Not impossible, but as my start-up learned, incredibly capital intensive. I always point to this as an example of how something reasonably close to a large, lightly-regulated market can still produce inefficient and negative outcomes for our society.