A Message To Robert Toll – You Are Inviting the Fox Into the Henhouse
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Robert Toll, CEO of Toll Brothers, is in the process of running right of the proverbial cliff and into the jaws of the waiting sharks. The home building company has had a rough time of it as the market has slowed. But instead of blaming his own company for incorrectly predicting the market and over expanding so much that the company is now in trouble, he blames the marketplace.
And worse, he is inviting the government to regulate the subprime mortgage market. As the appraisers yesterday thought that the mortgage industry led them into ruin, now Robert Toll is placing the blame on the industry. But once the government gets into an industry it loses the ability to self correct. And the bureaucracy that is a cancer on society starts to create a morass of minutia that chokes the innovations that helps markets recover.
“I think there ought to be regulation of subprime. I think there ought to be regulation of prime. I don’t think that the economy is best left to its own devices almost ever,” Robert Toll said at the Reuters Real Estate Summit in New York.
“Left to its own, every industry will sooner or later roll into a monopoly of one kind or another,” Toll added.
U.S. lawmakers are considering new rules to address recent problems in the subprime mortgage sector that has provided loans to borrowers with poor credit histories. Lenders are struggling with rising defaults as many variable interest rate loans reset at higher interest rates and U.S. home prices stagnate. via Reuters.
Did the mortgage industry screw up, sure they did. And the market is now correcting for it. But did Toll Brothers over commit in an over built marketplace, they sure did and that is the true source of their pain and losses.
But Robert Toll, do not think for a second their are not 100 folks in Washington that are salivating now that you have opened your mouth asking for more regulations. They see jobs, security, and power.
And if you think this correction in the market is painful, wait till the one where the government is in the middle of it. That ship never turns quickly.
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Pingback by Good to Go Pile . . . « Trading for the Masses on 28 June 2007:
[...] A Message To Robert Toll – You Are Inviting the Fox Into the Henhouse [...]
Comment by Chip on 29 June 2007:
You’re right — Toll’s was an idiotic, self-serving comment. Sic ‘em!
Comment by tcurranmortgage on 17 July 2007:
Instead of more government regulation—on top of RESPA and various indivdual State’s requirements—how about a dose of prevention, Mr. Toll?
How about we get the mortgage brokers separated from the real estate companies and the builders and developers?
Whose interest is really being served when there is a “mortgage professional on site!”???
Who is that mortgage professional looking out for? The consumer? I think not.
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