Money money money money, MONEY

As a small business person and former mortgage broker, I am always thinking about money. Cash flow is important for any business, especially people in the mortgage business since cash is the end use product. People get very emotional about money most of the time and when they are dealing with mortgages in the hundreds of thousands of dollars, they can get very jacked up.

I have been reading about the recent concerns about the "sub prime" lending practices of a few years ago that many are blaming for the current increase in foreclosures. It seems many mortgage brokers engaged in outright fraud in order to get people mortgage loans for homes they couldn't possibly afford. The consumer bears some responsibility, they did sign fraudulently prepared documents that overstated income in many cases, but the originating brokers are coming under scrutiny for knowingly falsifying documents and "over selling" unwitting borrowers.

The result is many of these "sub prime" mortgage loans are in default and people are losing their homes. What happened is mortgage brokers got greedy, mortgage wholesalers fed the greed by encouraging (or not actively discouraging) shady underwriting practices and consumers bought into the whole mess with visions of endlessly escalating real estate values and continued access to low interest mortgage loans with no consequences.

Now the sub prime lenders are facing criminal charges and families are left broke and homeless. This underscores the importance of trust. When borrowing hundreds of thousands of dollars for a home, deal with someone you can trust to do the right thing. Go with established lenders and mortgage brokers when shopping for mortgage loans and don't sign any document that has falsified information. If a broker or lender gives you documents with falsified information, RUN (don't walk) AWAY as fast as you can!