Signs of the Times

Not to be insensitive to those going through rough times... but here's another sign that much of the lending crisis, and ensuing housing downturn nationally, is actually a market in the process of correcting itself. The WA Department of Financial Institutions announced this week a big drop in the number of licensed mortgage originators (nearly a third from a year ago) and brokers (nearly a quarter) in our state following the 1 January deadline by which they had to fulfill more stringent testing, licensing and continuing education requirements. Prior to 2007 the mortgage industry was only marginally regulated here. In other words, at least some of the (predatory lending) rats seem to have left the ship.

We know now that across the country, and even here in Washington State, predatory lending practices started to become more common around 2005 as shady operators attempted to cash in on lower middle- and working-class families' fears that they were being left behind by the housing and real estate boom. It's those very loans which in part created the credit crunch this fall.