More Regulators Will Not Solve Problem In Housing Market

By Author: Nick Adama
Total Articles: 197
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One of the great misconceptions about the foreclosure crisis, collapse of the banking industry, and resulting economic depression has been that there was just too little regulation of the mortgage and financial sectors of the economy. Unfortunately, the exact opposite has tended to be the case, with so many laws, rules, and regulations that it would be almost humanly impossible for any company or individual to know them well enough to be able to follow them.

In fact, the vast number of federal laws designed to regulate the housing market and consumer lending industry have served to lull home buyers and owners into a false sense of security, rather than provide effective controls over the economy. While some regulations were meant to restrict lending to those who could not afford to pay back their loans, other actions taken by legislators and regulators have directly encouraged such lending.

Thus, homeowners now facing foreclosure who put trust in the federal regulatory structure to help them save their homes may discover that these agencies participated in the housing boom by encouraging artificial price increases. ...
... Now with the collapse of the bubble and accompanying declines in home values, these same bureaucracies are being given hundreds of billions of dollars to assist homeowners in solving a problem they originally helped create.

The following is a list of just some of the federal or semi-federal organizations or regulatory bodies that had relevancy to the housing market, all of which failed to see the bubble, predict the collapse, or deal effectively with the fallout from rising foreclosure rates:

Conference of State Bank Supervisors
Federal Financial Institutions Examination Council
Federal Reserve Board and Federal Reserve System
Federal Housing Administration
Department of Housing and Urban Development
Fannie Mae
Ginnie Mae
Freddie Mac
Office of Federal Housing Enterprise Oversight
Fair Housing and Equal Opportunity Office
United States Treasury Financial Crimes Enforcement Network
Federal Trade Commission
Office of the Comptroller of the Currency
Office of Thrift Supervision
National Credit Union Administration
Department of Agriculture
Veterens Administration
Department of the Treasury

And these are only the regulators that had relevancy to the housing market. Other agencies such as the Securities and Exchange Commission had more oversight over the financial investment firms, hedge funds, and banking giants. These were the companies that did so much to inflate the bubble and spread the risk of the collapse to overseas markets and throughout the entire American economy. Semi-private companies like the credit ratings agencies are also absent from the above list.

Could any more regulation possibly have stopped the banks from wrecking havoc over the entire economy? There have been armies of federal bureaucrats sitting in offices throughout the country who were taking taxpayer money in exchange for overseeing the housing market and financial sector of the economy. Instead of providing effective regulation, they fostered the false sense of security so many homeowners and investors mistakenly bought into.

The above list also does not include the various state and local agencies that are spread around the nation and which employ even more bureaucrats supposedly making sure artificial housing bubbles, predatory loans, and out of control foreclosure rates never happen in their jurisdictions. Have all of them also failed in their public service duties for which the state forcibly takes money from the same homeowners and consumers allegedly for protection?

Hundreds, if not thousands, of regulatory bodies throughout the United States were charged with making certain that the housing bubble and collapse never happen. All of them have failed, despite the vast sums of money they are able to appropriate (or print out of thin air, in the case of the Fed). And now homeowners are expected to give these same agencies even more of their money to protect against more damage being done to the economy?
Nick publishes articles on the ForeclosureFish website, which attempts to educate borrowers how they can prevent on their properties while they still have time. The site describes various methods to hold onto a house, including foreclosure refinancing, cash for keys, mortgage modification, filing bankruptcy, and others. Visit the site today to read more and find out what solutions you can use to prevent the loss of your home: http://www.foreclosurefish.com/