EDITOR’S COMMENT: Here is an interesting comment from Scott Baker — someone who “has no dog in the race.” They paid off their mortgage. The point here is that Lenders knew exactly who their customer was, but the borrowers never did. In a “free” marketplace, this choice was taken out of the hands of the borrowers by concealing the real source of funds and the identities of the players.

The comment makes a good point when he says that he chose a Lender based upon reputation and his perception of the relationship he wanted with a Lender. This was also eviscerated. And his point is fairly made — there was no disclosure and he was coerced into doing the deal because “everybody’s doing it.”

Sound familiar? If it does, it is because that is exactly how the rest of the deal went and our society is slow to realize that amongst the many freedoms we gave up over the last decade was the freedom to choose the party with whom we do business.

I’m not in the same dire situation as so many commenters on this page, having paid off my mortgage before the s*^t hit the fan.
However, I did try to object to the clause in my mortgage that allowed my bank to split my mortgage via securitization to other investors. My reasoning was that not only should a lender be able to choose their borrowers, but a borrower should be able to choose their lender, even if the terms ostensibly don’t change. In fact, I specifically chose (what I thought) was a reputable lender, based on size, reputation (at the time), and, finally, terms. I specifically did not want any of the fly-by-night lenders that flooded my spam folder in those days (thankfully, these seem to have disappeared).
However, my RE lawyer said I had no right to object to securitization because “they all do that.” So, reluctantly, I signed the contract with that clause. It turns out that the bank did, indeed, securitize my loan, and virtually all others, but I paid it off in full shortly after anyway.
I still maintain that a borrower has a full right to decide to borrow from one party and not another.

4 Responses

  1. How about the right to know your real lien holder? Which begs my next question, should I quit the NAR?
    (National Association of Realtors)

    You see, I saved up money to join the board of Realtors. I wanted to try and earn a living (perhaps) selling property. If you were to guess that a majority of the business out there these days in real estate is short sales and foreclosures… you’d be correct.

    But conducting a short sale requires finding out who the lien holder is (mortgagee).

    And there’s the rub!

    A standard Fannie/Freddie mortgage (contract) states in Section 20 that the “note” can be sold, as long as the mortgage goes with it (meaning it is to be assigned and recorded in public record).

    But MERS prevents that from happening.

    So, back to my story… a new member of the board of Realtors pays $1,300 to join plus a fee to subscribe to MLS which is like $300+/-. Then you have to take a few training courses. First there’s the mandatory “ethics” course you will take when becoming a member of the National Association of Realtors.

    Article 1 states;

    Protecting and promoting the interests of the client & an obligation to the client is a “primary” interest.

    Article 2 states;

    Must avoid exaggeration, misrepresentation or concealment of pertinent facts about the property or the transaction.

    *My question is this; should I quit the NAR? I don’t think they would like to see the my 2011 training course outline. But I guarantee… if they did, they would go ape-s**t for a new product that would allow their clients to sell their properties and negotiate from a position of strength rather than such a great position of weakness as they have been accustomed to doing.

    To anyone at NAR wanting to learn more;
    email me at

  2. My point. This was never a free market. It was controlled by the joint ventures between the builders and the banks. The banks controlled the lenders with no fair options available
    to the borrower. The banks controlled the appraisers who were not favorable to the borrower and the banks controlled the builders therefore they escalated the values that were not favorable in final terms to the borrower. Again the banks controlled the appraisers who affirmed the price escalation. The transaction was one sided and it was not favorable for the borrower. The judges are blind and have cotton in their ears. Further, I suspect that maybe somewhere in this mess the Sherman Anti Trust Act must have been violated



  4. great article and we are finally really getting it.

    this is something the banksters will understand.

    and unfortunately this is more of what we need.


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