Lou Barnes writes;

First, of the awful subprime originations late 2005 through 2006, 50 percent of borrowers could have qualified for “A” paper. Contemptible behavior by desperate salesmen has concealed borrowers in better shape than feared, and withdrawal of trash credit is unlikely to collapse housing.

Wow! If that’s true, or even partially true, it says two things.

1) The chance of a real estate bubble burst caused by a sub-prime mortgage melt-down are greatly reduced.

2) The States need to regulate mortgage lenders a hell of a lot better.

Putting a borrower who qualifies for a regular loan into a sub-prime loan is contemptible because the sub-prime loan will cost the borrower a ton more money over time… but the lender makes a ton more money on the sub-prime loan.

P.S. Please use a lender recommended by your Realtor. If I were to find out a lender on my list took advantage of one of my clients, I would simply take him off my list and he would receive no more referrals from me. So you have a little more leverage over a mortgage lender that is recommended to you by your Realtor. The lender will invest more time in making you happy if he knows your happiness will effect his future referrals from that Realtor. By the way, lenders do not pay me or any other Realtor for referrals. That would be against federal law.

We simply recommend lenders who have given our clients good service in the past. That certainly is in our (Realtors’) best interest because when a lender screws up, it sours the whole transaction… even if the client chose the lender. So the odds of me ever getting a referral from that client nosedives. Buyers want a smooth, hassle-free transaction and a big part of that is selecting the right lender.