Is the legislation pointed in the right direction?

http://www.mlive.com/newsflash/index.ssf?/base/politics-10/119817687368220.xml&storylist=washington

Kudos to president Bush for offering tax relief to people in foreclosure or facing bankruptcy. Shame on the people in that situation for making irresponsible decisions, however, it frustrates me to know that the lenders out there are able to get away with this.

The industry that I work in is highly regulated, and it should be because I deal with individuals hard earned savings. It is my duty to make responsible yet productive decisions in the accounts of my clients, and I do my best to do so. I take the consideration of risk, cost, and potential reward into every client situation, and every client is unique in their desires and tolerances in all of those areas. Even with the strict regulation that is in our industry, there are people out there who are irresponsible and make selfish decisions in peoples accounts. They are not client focused, and the long term well being of their client takes a backseat to the short term boost of their checking account.

The same has been made true in the mortgage industry. There are responsible lenders out there who are very customer focused, but there are also people willing to do whatever it takes to close a deal. For instance, take this paragraph...

"An estimated 2 million to 2.5 million adjustable-rate mortgages — worth some $600 billion — will jump from low initial "teaser" rates to higher rates this year and next. Steep prepayment penalties have made it difficult for some to get out of their mortgages, and some overstretched homeowners can't afford to refinance or sell their homes."

I mean, good grief, they call them TEASER! rates for crying out loud. They lock you into the higher rates and they TRAP you with prepayment penalties which means you can't refinance. Again, shame on the borrower for doing an ARM in a low interest rate market, but is it not the lenders job to explain to the borrower that "we are in a very low interest rate market" and "you should lock in this rate because I don't think we'll be down here forever."

The government should crack down on these people who are leading ignorant borrowers down a path of destruction. These borrowers don't know any better and for the most part, they are relying on the recommendation from the lender. That trust has definitely been jeopardized.