Summary

a) existing federal, state amd municpal compliance check and balances exist b) move Rating Agency solutions to subprime mortgage losses in the large secondary market traunces into the origination systems & procedures

Analysis

I have spent a good portion of my 30-year career in Mortgage Lending Technology designing and implementing technology solutions in the mortgage origination phase.

Currently in-place; Federal (HOEPA), State & Municipal (High Cost) prohibitions to STOP FROM FUNDING any out-of-balance and possible predatory loans.

This process has been in-place for over a decade, and the viability is definitely up for debate.

However, the same technology used by the largest global originators of mortgages, to STOP FROM FUNDING these predatory loans could also use a dose of compliance metrics from the rating agencies.

Basically, the current predatory compliance protects the potential borrower of the note - my suggestion is to ALSO protect the mass investor/buyer of the note.

Move the rating agencies metrics to the beginning of the mortgage origination cycle and STOP FROM FUNDING if the metrics so indicate.

Mark Mariotti consults with leading institutions through GLG

Mark Mariotti, Chief Executive Officer

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Chief Executive Officer, Future Management Holdings Inc

 
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.