Tuesday, January 31, 2012

The Unintended Consequences of the Dodd-Frank Act

Everything has cause and effect. If you kick a ball, the ball will roll. If you tease a cat, the cat will growl. If you put your hand in a pot of boiling water, your hand will burn. We see this a lot in our economy, especially now in the housing industry. And this isn't any ordinary industry: It's a driving force for the entire economy, and your government is trying to suck it dry.

When you buy a house, you have to buy appliances, furniture, utilities, etc.. This in return creates jobs for the people, to make washers and dryers, to make chairs and beds, to run operations so that way we can have clean water; and it's all because of housing. But in April of 2010, the Dodd-Frank Act was passed just shortly after the Financial Crisis of 2008. While the Dodd-Frank Act might seem lengthy with its 2300 pages implementing 400 new regulations, it has one sole purpose: To over regulate the Mortgage industry.

If you were a car salesman, could you imagine how you would feel if the government told you that the maximum commission you could make on any car was 50$. It doesn't matter if you sold a Nissan Leaf or a new Bentley, all you could make was 50$. That is what they have done to the Mortgage industry. They made all loan officers make the same amount of money on any given loan. They have changed the way appraisals, title fees, flood certifications, and credit reports are all processed. This makes it longer to get a loan, because it costs more to get it passed which then goes down to the consumer. It is a sickness, it is broken. The mortgage industry will resurrect the housing industry, and by crippling it with oppressive legislation is doing an injustice to the people, an injustice to America.


Smith said...

Why would our government allow such a regulation to be passed?

Brayden said...

Someone or something had to be blamed for the economic crisis of 2008. So, by allowing the Dodd-Frank Act to pass, Congress was able to point the finger at the Mortgage industry. Why would Chris Dodd or Barney Frank, the two sole authors of the legislation, accuse the Federal Government of this fiasco when Fannie and Freddie Mac give them the most money out of anybody in Congress for campaigning. That would be like slapping the hand that feeds you.