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Anchor Intro: With more and more foreclosures dotting the landscape, people are asking why. For many the answer is bad mortgages. Will they be able to prevent this in the future? Bankrate.com finds out.
Voice over 1: This is a sign of times. And according to some, a big reason for record foreclosures is lax lending.
SOT: "I think that what created this was a lot of very loose mortgage guidelines...fog a mirror, you qualify ...it's true! Nothing down, no interest, no equity into the property... no commitment. I think we created this."
Voice over 2: How did lenders make such bad decisions? Some say a big part of the problem was bad brokers: unlicensed, untrained and unregulated mortgage brokers who were more interested in making a commission than a responsible loan.
SOT: "There's more to being a mortgage guy than just throwing an interest rate out there and having a guy sign some papers and closing the deal."
Voice over 3: So the Federal Reserve has proposed new rules that would require all states to license mortgage brokers, report their disciplinary history, establish minimum educational requirements and set up a process for revoking the licenses of bad apples. Some states do this now, but many don't.
Voice over 4: And it's an idea whose time has come for long-time licensed professionals like Gary DelGreco.
SOT: "I think that consumers need that and more consumers should want that."
SOT: "And if the interest rate is an eighth of a point higher, then go with the quality individual and a quality company...I mean, you get what you pay for."
Standup: Almost certainly some kind of mortgage reform is in our future. But whether it be boon or boondoggle has yet to be determined. Still, keep an eye on the news. See how these changes might affect your next loan. For Bankrate, I'm Kristin Arnold.
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