Perhaps Obama Doesn't Know What a Broker Is?

This week President Obama told the Senate to take a hike, installing former Ohio AG Richard Cordray as the new head of the CFPB via a recess appointment. The Republicans blathered on about “abuse of power” without mentioning that past presidents (including George W. Bush) have pulled similar recess stunts in the past. But the real story here is that the White House continues to use loan brokers as the whipping boy for the housing/mortgage meltdown. A recent Cleveland Plain Dealer story (and photo op) on the Cordray appointment ties in a sit-down that Obama and Cordray had with an abused Cleveland mortgagor. The story on two occasions mentions first the “predatory lender” that took advantage of the borrower, William Eason, and then notes that with the help of a non profit “…the mortgage broker's company wrote off part of the loan and backed off on foreclosure.” That's funny. I didn't know that loan brokers were involved in such things as foreclosures. I thought that brokers just facilitated the closing of a loan, staying out of both funding and servicing. The problem is this: in the past Obama has slammed loan brokers for abusive practices without ever once mentioning the dirtbag subprime retail LOs who worked for Roland Arnall's Ameriquest, Household Finance, and Associates First Capital Corp. – all of which were sued by either the FTC or states for predatory lending. Indeed there were bad brokers out there during the subprime boom, but it can be argued that these bad actors are mostly gone thanks to tighter regulations that make brokers accountable – more accountable than LOs working for depositories. Obama needs to educate himself or get better counsel.