Nazis Baathists and Mortgage Brokers
When we decided to rebuild Western Europe after the end of World War II, we did something rather controversial: We used former members of the Nazi party to help in the rebuilding process. We used them because they were the people who knew how things ran and how to get things done. And despite their former affiliations they became critical to the extraordinary success that was the reconstruction of war-ravaged West Germany. In Iraq, we tried a different tactic. We purged everyone in the involved in the Baath Party, the group that ran Iraq under the former dictator. De-Baathification as it was known is also known for its failure to bring working systems or reconstruction to a war-ravaged Iraq.
Now here come the Mortgage Brokers. Sharp criticism has been leveled that those who were at least partially responsible for the sub-prime mortgage meltdown are now setting up shop to work with borrowers in trouble. Many are outraged that we are letting the very people who made the mess have the chance to profit from fixing the very problems they helped to create.
The response to this is simply that a pragmatic approach to solving the problem is more important than the principals some think have been violated. No doubt many people out there peddling assistance to homeowners in trouble are the very ones that pushed wrong products on the wrong people. However, the problems in the marketplace loom large. Government agencies are studying the issue, weighing, considering, pondering, but not actually helping. The market continues its harsh correction and people are losing their houses.
We need the professionals involved helping to renegotiate bad loans. And by the way, we also need regulatory oversight to keep charlatans from abusing the people in trouble. So let the former participants who helped create the wreckage help those people in trouble. They may be the best equipped to actually work through the issues and the opportunity to make a buck is their incentive to do it. It may offend some sensibilities, but now is the time for a realistic and practical approach to fixing the problems that exist.
Now here come the Mortgage Brokers. Sharp criticism has been leveled that those who were at least partially responsible for the sub-prime mortgage meltdown are now setting up shop to work with borrowers in trouble. Many are outraged that we are letting the very people who made the mess have the chance to profit from fixing the very problems they helped to create.
The response to this is simply that a pragmatic approach to solving the problem is more important than the principals some think have been violated. No doubt many people out there peddling assistance to homeowners in trouble are the very ones that pushed wrong products on the wrong people. However, the problems in the marketplace loom large. Government agencies are studying the issue, weighing, considering, pondering, but not actually helping. The market continues its harsh correction and people are losing their houses.
We need the professionals involved helping to renegotiate bad loans. And by the way, we also need regulatory oversight to keep charlatans from abusing the people in trouble. So let the former participants who helped create the wreckage help those people in trouble. They may be the best equipped to actually work through the issues and the opportunity to make a buck is their incentive to do it. It may offend some sensibilities, but now is the time for a realistic and practical approach to fixing the problems that exist.
David Levin
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