Oh what a difference a year makes. One year ago, housing sales were booming. One year later, sales are at their worst in 16 years. Let the blame game begin. Depending on who you talk to, borrowers, Wall Street, banks and the Federal Reserve receive their share of blame: – Borrowers for not being realistic about how much they could afford, – Wall Street for bundling mortgages into securities and selling them to investors, – Banks and mortgage companies for packaging subprime loans for those with weak credit and high hopes of achieving the American dream, – The Fed for keeping interest rates so low for so long beginning in 2001. Yet mortgage brokers are the group getting the largest portion of bad press. Sure, the financial woes of banks and mortgage lenders like Countrywide Financial Corp. are in the news, but coverage tends to be factual, not personal. Meanwhile, the New York Times, Los Angeles Times, Washington Post and the Orange County Register have run front-page expos & #233;s on “unscrupulous” lending officers playing used-car salesmen to sell “innocent” borrowers mortgages beyond their means. This month on Capitol Hill, fair-lending legislation is being debated mostly because of the acts of mortgage brokers in the subprime mess. Congress and consumer advocates say brokers engage in deceptive lending practices and insufficiently disclose mortgage terms. Another thorny issue is the higher commissions brokers are paid in sales of subprime loans. In a great public relations move, Washington Mutual, the largest U.S. savings and loan, revealed this month that it would require the mortgage brokers it works with to disclose their compensation and all murky lending terms to borrowers. In other words, blame the brokers, not WaMu. Many brokers are fighting back, blaming the banks and mortgage companies that package the loans and establish broker fees. “The bottom line is that banks definitely allowed people to over-leverage themselves, and now they are in a period where they have to correct the market,” said Bill Knox, senior loan officer at Bristol Home Loans in Sherman Oaks. “The banks send wholesale reps to our office, they q uote us rates and fees, and we quote those fees to the client. The buyer doesn’t see the bank, only us,” Knox said of why lenders are getting the blame from borrowers. “If you are going to regulate one aspect of the industry, put restrictions on the direct lender,” Knox said. “Why do we get crucified?” Yet Knox doesn’t blame any one entity in the mortgage-lending chain. “To place the blame on banks or loan brokers or borrowers is ridiculous,” he said. Knox, whose sales have been 40 percent in subprime loans, said the majority of lenders are conscientious about explaining convoluted loans to clients even though loan documents average, he said, between 15 and 100 pages. “You go over the main information,” Knox said. “You try to explain it to them until you are blue in the face.” One of Knox’s clients read a mortgage contract all day, he said. “The next day she came in and signed everything. And then a year later, she calls to say she didn’t understand any of it.” Salvation Army Lease NAI Capital broker Ray Bishop and listing agents J. Richard Leyner and Carl Menzer represented Kasden Sepulveda Building Partnership in negotiating a lease in Van Nuys to the Salvation Army, Western Territory. The five-year lease, valued at nearly $2 million, is for a 24,600 square foot retail building at 6300 Sepulveda Blvd. “The property was ideally suited for a Salvation Army store primarily due to its central location in the San Fernando Valley,” Bishop said in a news release. He noted that the property was originally designed as a bowling alley before being converted into a furniture store with two levels and a large showroom. The front and rear entrances make the building highly accessible. Space in Burbank Rexford Industrial LLC has purchased the 42,500 square foot Captions Inc. building located at 901 W. Alameda Ave. in Burbank. The price was $9.3 million. The buyer plans to convert the building into creative office space and lease out the entire property, according to a news release from NAI Capital in Encino. The building is located near the Burbank media district and is an ideal property for entertainment office space, Kristen Bailey of NAI Capital said in a news release. Bailey is listing the space with Chris Baer of Ramsey-Shilling. For more information, call (818) 905-2400. Senior Reporter Mark Barna can be reached at (818) 316-3123 or at [email protected] .
