A Senator Calls for Mortgage Loan Disclosure

As the mortgage scandal rocks on there is at least one call for clarity in disclosure. Let's hope that it passes and let's hope that it goes far enough. The only way to truly know if mortgage lenders are giving preferential treatment is to see the size of the loan relative to market value along with points paid and interest rates (along with average market rate for similar loans at the time of loan initiation). It is a scrutiny that few of us would desire of our personal lives but it is a price of public office.

Financial Incentives Reduce Liklihood of Investigation

I think that the average American believes that most political officeholders gain some financial advantage from their position. It is a logical conclusion. Those who would benefit from legislation have a financial stake in the votes or influence of those in positions of power. The Countrywide Mortgage scandal now overtaking some members of Congress is probably viewed by many as merely the tip of the iceberg on the kinds of benefits afforded to Senators and Representatives.

Further enforcement of this belief by the public is afforded by the reluctance of the officeholders to conduct an in-depth investigation. There is apparent fear that much more will be uncovered.

There is opportunity for preferential treatment in many areas. Things like waiving minimum capital requirements for investment purchases, special rates on insurance policies, reduced interest on loans, reduced collateral requirements for business and investment loans, tips on real estate parcels, tips on litigation, and on and on. It is easy for the public to be suspicious. It is unlikely that there will be real reform. It is refreshing to see a call for investigation at the risk of exposing members of his own party. I wish Representative Hensarling luck in his quest. I hope that it is not merely a low-risk political maneuver. Low-risk because it is unlikely to garner enough support from fellow members to ever occur.