And the reason why there are 'loan originators' in the first place is
the banking deregulation about reselling mortgages.

Dave wrote:
What changes in regulations are you referring to?


The ones that allowed banks to sell mortgage contracts to specialized
institutions (ie non-banks) in other states where other terms applied
to that contract.

Dave, I'm sure you know more about the Federal and NY (and probably
other states too) banking regulations than I do. I also know that NC
law *still* forbids a contractee from using a change of address to
change the terms of a contract. I know (unspecifically) that other
states have changed laws affecting this in the past 12 years, maybe
there are also Federal laws involved (other than Article 4 of the
Constitution). For example, when the bank holding our mortgage was
bought out back in the late 1990s, they sent us a very sugary letter
explaining that they were kindly NOT changing the terms of our
mortgage. OTOH I know of several people around then, and in subsequent
years, who have had resold mortgages with changed terms. Insurance and
tax escrow arrangements, for example.


For the past few years, most banks have been shucking their mortgages
as fast as they can. All they were doing was originating loans for the
fees generated, so why would they care about risk?

Definitely part of the problem.

And this could be driven by CRA... a bank's natural response to the
rise in risky mortgages, shuck 'em!

But I still don't see the CRA... or President Bush's "Ownership
Society" drive... as the biggest smoking gun behind this credit crash.

I'm also waiting, dollars in hand, to see the market bottom out.....

Regards- Doug King