Patterns and behaviors CHANGE - and then CHANGE again...

Implications: a) it does appear that the independent mortgage broker is going the way of the independent insurance agent and the independent fee based financial planner b) technlogy will be key in providing the independent mortgage broker, the acutal end-user (borrower) and actual owner-buyer-investor of the mortgage more  fair (APR - common comparrison tool)  choices

Analysis: I personally don't have any blame game to play. In reality, there has been another failing system tumbling down and causing severe harm to all those grabbing the falling knife.

Further, (and full disclosure) I have implemented the federal/state/municipal mandated compliance requirements at the Washington Mutuals, GMAC's and Countrywide's mortgage origination units.

MANY MORTGAGE BROKERS, BORROWERS AND INVESTORS WERE KEPT OUT OF A LOAN IF IT LOOKED PREDATORY. Everyone moaned, tho - since they all wanted the loan to fund - but the systems were in place and worked many times over. JUST NOT IN ALL CASES.

Some of the funded loans which passed current compliance (many loans as we have now uncovered), were bundled, securitized and sold in the secondary market. The secondary market CREATED EXTREME LIQUIDITY thereby keeping the independent mortgage broker funding large volumes of high loan-to-value (LTV) loans. The cycle turned negative and the LTV became worse and borrowers walked.

Everyone is suffering... so my suggestion is to prepare better fair lending underwriting and compliance guidelines. These best practices can be developed from the existing metrics in place created from the poor performing loans.

Better compliance procedures and systems will create better online tools which will allow the independent mortgage broker , and those borrowers that rather go it alone much more prudent decision making.

The investors; let's NOT forget, they put up the principal... will begin to feel more comfortable as  the transparency and compliance of the loan (bundled loans) they are buying look more promising.