What we know for certain is that there are no quick fixes to the failures and abuses in the mortgage market — particularly those in the sub-prime market that are at the bottom of the current wave of foreclosures. But in the rush to develop policy solutions to stop and prevent foreclosures we must not forget that sometimes it is the little things that make the biggest difference; and in this case it may be allowing borrowers to get advice from a trusted source while making the biggest financial decision of their lives. For far too long borrowers have depended on the advice from realtors and mortgage brokers who themselves have a financial stake in the borrowers’ decisions. Trusting their advice proved too costly for those families that now face the harsh realities of losing their home.

In a report entitled, “Understanding Mortgage Market Behavior” the Joint Center for Housing Studies from Harvard University noted that

… Because consumers have malleable preferences, lack price awareness, struggle with shopping and have difficulty making choices with time dimensions, new initiatives are necessary to overcome today’s aggressive marketing practices. These include:

(1) Provide for a Second Opinion through a Trusted Advisor Network.

Building on the existing community-based infrastructure as well as national scale organizations and foundations committed to social justice, a third-party advice system could provide a network of “trusted advisors” with incentives aligned with the borrowers’ interests.

• Expand community-based and national nonprofit efforts to provide mortgage counseling services that guide consumers to “good loan” products.

• Establish a for-profit ‘buyer’s brokers’ network that works explicitly for the buyer for a flat fee.

• Develop tools to support these networks including a second opinion hotline, on-line pricing guide, and national database of representative rate sheets.

Current rules essentially leave borrowers standing alone in the mist of a wild mortgage market with no one to trust. A Network of Trusted Advisors could change that for the better. The IDA field is a great example of what can happen when mission-driven, non-profits jump in the ring on the side of consumers.