I prefer to think—based on my experience in the actual marketplace—the consumers were responsible in a very large part for the origination of so many “bad” loans.

I lost a lot of customers, especially the Hispanic ones, to unscrupulous, lying mortgage professionals.

While I would offer the correct loan for the applicant—usually a fixed rate loan, and one for which the applicant was actually qualified—all the consumer in front of me could hear was the interest rate.

The rate I was quoting was higher than the Neg-Am, 2/28, I/O, 3 yr prepay loan being offered by the newbie loan officer down the street (you know, the guy who six months before was flipping burgers in a fast food joint).

I just refinanced a client referred to me by her accountant.

She has been a homeowner for 8 years. A little over two years ago she refinanced with some cash out to take advantage of the low rates. She wanted a 30yr fixed rate loan.

The loan officer swore that’s what he gave her. She didn’t use an attorney at the closing to represent her or read the documents for her.

In fact, the loan was a 2/28 ARM I/O set to adjust now, July 2007.

When I first spoke to her she said, “I want a fixed rate loan and I just want to work with someone I can trust.”

(On my recommendation, she used an attorney at closing)

The rate she refinanced at two years ago? 6.00%.

Even though she was an experienced homeowner, I’d bet dollars to donuts she only heard the interest rate and paid no attention to the terms.

The problem is: how do you get the consumers to wake up and realize “lowest rate” is not the most important consideration?