Guest blog written by Gene Colter.

Come with us now as we descend into hell. Down through the first circles and on to the murderers and
harmers of the innocent and young. Gaze upon the horrors to be seen there. –

I like to think I’ve gotten pretty good at spotting and avoiding the come-on letters, but this one got by me. It came in a good-quality envelope, the sort of one used to see wrapped around personal letters back when people wrote letters. So I opened it. On the cover of the card inside was a color photo of a darling baby girl. She was some months past birth, given her ability to hold her head up and the stud earrings she was already sporting, but she was still swaddled like a baby. My mind raced: Whose baby is getting christened? Why don’t I recognize this lovely little doll? I opened the letter to find out.

Whereupon I found out that I, Eugene, could lower my monthly mortgage payment if I could meet with a representative who had reviewed my loan and who would soon be in my neighborhood to chat.

That representative, of course, would be a mortgage broker. He and his ilk are well represented down where the sun never shines. And, despite a daily pounding of news coverage on the woes of the nation’s housing market, some of the worst salespeople in the country continue to ply their trade just as they did when housing prices were inflating and loans of dubious merit were being extended to people who had little hope of being able to live up to their terms.

This is an industry that has not even begun to grasp the basics of reputation management. Salesmen in general have always had a complicated reputation, but the mortgage-broking industry stands out in its awfulness.

This is an industry where your broker may work in a nice office and even wear a tie, as many do in Northern New Jersey, where I live. They want you to know they are looking out for you. They want to be your pipeline to the American dream.

And they are completely and utterly unnecessary. This country could have reached the roughly 70% home-ownership rate some experts now claim without these middlemen – though presumably it wouldn’t have, and that’s the problem. It’s perhaps an awful but nonetheless economically valid fact that the American Dream is not for everyone.

The mortgage-broking “industry” helped sell us the lie in a way that the local banks and other lenders never did. Mortgage brokers are simply volume dealers. They are not about quality in any way. 

Efforts are being made to curb the excesses and abuses of this shady sector, but they are not a lock: Last week the House passed legislation to tighten the screws on brokers (and bank-loan officers), specifically to keep them from steering homebuyers into higher-cost loans they can’t repay. But news reports suggest Senate support is much less certain.

I called the mortgage broker whose name was on the card, and after gentle preamble asked him if the baby on the card was his. He told me that he had no idea what I was talking about. I described the card. He told me that he didn’t have any knowledge or control of what the “marketing department does.” When I asked him how he slept at night he went into a script about calling the national opt-out line for people who don’t want to receive loan come-ons.

(I had already registered for the opt-out. The online or phone options only get you five years off the lists the brokers work from. Apparently it takes about five years for the opt-out to start working. Why five years? Why is it that you have to write a letter for permanent opt-out? Why the two-track system that makes it harder on consumers?)

Well, at least I can lower my loan payment.

Except, no, the monthly payment quoted by my new neighborhood mortgage broker was based on a loan that’s smaller than the one I have. This is New Jersey. Not Des Moines. So, deceitful and wrong.

That about sums up the entire industry.