That a lending broker has no fiduciary duty towards the person he lends the money to is already scary but when the government stepped in to change this, guess who went up in arms?

According to a post on Calculated Risk, the Wall Street Journal wrote:

“Borrowers often see mortgage brokers as their allies, searching far and wide for just the right home loan at an attractively low price. But many brokers are making it clear they don’t see things that way. They are fighting efforts by federal and state politicians to impose a fiduciary duty on them to put their customers’ interests first, as lawyers, real-estate agents and financial planners generally are required to do with their clients.

“The mortgage broker does not represent the borrower,” says Chris Holbert, president of the Colorado Mortgage Lenders Association. “We sell access to money.” The industry group recently opposed language in Colorado legislation that would have required mortgage brokers to act “primarily for the benefit of the borrower.” That provision was later deleted. . . .”

Well that is a very lame way of trying to have it all. Unfortunately, you are shooting yourself in the foot.

And it continues with: “The National Association of Mortgage Brokers, the main nationwide trade group for brokers, argues that brokers work neither for consumers nor for lenders. Imposing a fiduciary duty would increase the risk of litigation over whether brokers are to blame for loans that go bad, says Joseph Falk, legislative chairman of the association.”

Yeah, why bother us, everyone knows the first people in line to get sued are the Realtors, not the lenders.

Yes, definitely a society of very little accountability. How far will we go? Isn’t it obvious we are heading for a disaster?

I believe it has been for a few months already, despite the media irrelevant old news, partial takes and overt manipulation.

Money magazine had a few good articles in its May issue. I will write about it throughout this week. It is always interesting to gauge the non-real estate specialized press take on real estate.

The basic argument for buyers is choice, choice, choice. Indeed, with a huge supply of homes on the market, their is plenty of choice.

Low rates. Yes, 6 to 8% might seem like a lot but remember that ten years back, it was closer to 20!

The magazine believes prices are falling. I can’t say for sure. Some condos prices have dropped, especially in the $200,000 – 500,000 range. I just have not seen it yet in a substantial way in our city, but you never know what will happen next month.

Check back tomorrow.

Business Week wasn’t the only one to pick up on the strange dance numbers do, Calculated Risk also did.

In this post, they retraced year-end inventory and months of supply numbers, since 1982.

This sentence particularly caught my attention: “The “months of supply” metric is now above the level of the previous housing slump in the early ’90s, but still below the levels of the housing bust in the early ’80s.”. Now that is a development. The first thing we need to think about is what was the difference between the 80s and 90s. One thing comes to mind, the incredible leaps and bound technology took then.

We are now at 8.4 months of supply, well past the critical 7 month barrier. “Both the numerator and the denominator are moving in the wrong direction. Not only is inventory at record levels, but sales – though falling – are still significantly above the normal range as a percent of owner occupied units (a measure of turnover).”

This is what I like about individual bloggers who really know what they are doing, they offer better data and conclusions that regular well established magazines and websites that still depend too much on advertising and the pressures that follow.

But wait, there’s more… Part deux!

Another very good point and little covered by established media, one of the rarely mentioned stories, related to the housing boom, was the increase in turnover of existing homes. This helped shape the stage a few years back.

Anyway, you get the gist.

How did so many get overstretched in the housing boom? A good question asked by Business Week’s Peter Coy. Most of us have a pretty good idea and as usual, we blame the “professionals”.

Since we are living in a time of very little accountability, it is only normal the media manipulates people into blaming it all on a scapegoat. True enough, many lending companies made a huge mess by not even thoroughly checking their clients past.

One of the reason why so many are now stretched, according to Coy is that they bought more house than they really needed. There’s evidence for that in a Census Bureau report this past week.

According to Census, 20% of occupied homes in 2005 had four or more bedrooms. Poking around elsewhere on the Census website, I find that the average number of people in a family household last year was 3.2. Figuring that the mommy and the daddy are usually sharing one bedroom, it sounds like there are a lot of empty bedrooms out there in Foreclosure Land.

As Spock, T’Pau and Tuvak would say: “Interesting”.

Everyone knows, figures can’t lie but liars can always figure. In other words, statistics have so often been manipulated to influence people.

According to the latest statistics for new homes, sales are up 16% which is surprisingly good.

John Burns gave his point of view even before today’s numbers. He had been warning his clients for more than a year about distortions in the data for new and existing home sales, which he believes is lulling policymakers into believing that the housing downturn has been relatively modest and no cause for alarm.

Burns finds conflict with the official sales data. His firm purchases and compiles home closing data for 181 key counties in the U.S. where 55% of the population lives His data shows that sales have fallen 22% over the past 12 months over the prior 12-month period. This is pretty accurate as I have noticed that most Realtors and lenders, along with most businesses associated with housing have lost about one third business since the slowdown of 2005. He also notes that the Mortgage Bankers Association’s purchase application index – in effect, a measure of the number of people filling out loan applications – is down 18% from its 2005 peak. His question: How could sales have fallen by less than 18%?

Burns also points out that the nation’s two largest homebuilders, D.R. Horton and Lennar are reporting that orders have declined 27% to 37%, year over year – again, far less than the official numbers. And they both have dropped prices significantly in many markets to generate sales, while the resale market hasn’t. Why not?

So are we being fed again manipulated statistics or are we not being given the whole picture. I am sure most of you have their idea on the subject.

Click here to read the original article.