Robert,

I agree, some unscrupulous loan officers threw clients under the bus on a daily basis. I for one would not have been able to sleep at night if I followed the lead of many l/o I had seen.

Take for instance, Bank A is offering a 5/1 ARM at 3.25 PAR. Meaning the PAR rate you COULD give the client is 3.25% for the first five years of their 30 year mortgage, with the 6th year becoming annually adjustable.

But.... here is where the filthy thieving LOs made all their money. Instead of giving their clients a great rate, they instead start tacking on the lender paid perks.

1. Points for rate = Bump the rate half a percent, lender pays you .75% (bip) Bump them up 1% and that pays 2 bips 1.50% on the back of the loan. Paid by the lender not broken down on the HUD.

2. Points for PPP = Tack on a prepayment penalty of 5 years and the lender may pay you another .75%

Now, take your 2.25 points on the back and your 2 points on the front you know have a 4.25% loan for the client that pays you 8,500 on a 200,00 loan.

Now think about offering the libor which par rate started at 1.25% I have seen loans with 10 points on them. Disgraceful.

Now take into consideration many of those 5/1 and even 7/1 arms still havent adjusted yet. I think the ARM adjustments were more of the cause than the lack of work. Although the job loss is a factor, I believe the ARM adjustments made a much bigger impact.

I for one tried to sway all my clients to take a 30 yr fixed or a 15 year if they could afford it, with an aggressive paydown program to show them how to shorten their loan with extra principal payments. Anyone that absolutely demanded an ARM I told them under no uncertainty that their rate will go up without a doubt.

Who is to blame? #1The lenders, #2 The investors buying those loans, #3 The Loan officers selling those loans, #4 The government making the loans possible, #5 The home owners and their greed.

Just my humble opinion though.