The system of selling on commission only works where the seller has to work to make the sale. Widgets aren't easy to sell, you gotta talk people into it. Car salesmen have lots of competition, tough to make a sale. But selling money on commission is nuts- the customer already wants the product, and its the lender that needs to impose rules and conditions to keep from getting into trouble. Enter the mortgage broker, who only gets paid if a loan is made- so you've got borrower and broker conspiring to defraud the lender, and defraud they did, after the underwriting rules got loosened by Barney Frank and Company. Imaginary income, NINJA (no income, no job or assets), imaginary down payment, etc. If the old system of the loan officer being an employee of the lender had not been abandoned, the bubble would never have happened. The bad news is, the recession would just have come sooner, because the sad fact is that there just isn't enough work left in this country to keep everybody employed. The housing bubble and stock market bubble masked that for awhile, by creating artificial demand.
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Today's Featured Article - Listening to Your Tractor - by Curtis Von Fange. Years ago there was a TV show about a talking car. Unless you are from another planet, physically or otherwise, I don’t think our internal combustion buddies will talk and tell us their problems. But, on the other hand, there is a secret language that our mechanical companions readily do speak. It is an interesting form of communication that involves all the senses of the listener. In this series we are going to investigate and learn the basic rudimentary skills of understanding this lingo.
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