It's common knowledge that many people throughout the United States are suffering due to foreclosure. Yesterday a new friend brought to my attention that the media is too quick to place the blame on those who lent the money to under qualified buyers, and not enough emphasis of blame is placed on those who agreed to borrow money they could not afford to repay.

I happen to agree with him on this point. Many people agreed to repay loans they cannot afford. As a result many homeowners are facing foreclosure, lenders are stuck with unpaid debt and the end result is a nearly paralyzed real estate market. The media doesn't seem to give this much coverage.

But how did this really happen? I happen to have a unique perspective on this because about five years ago I started working as a loan originator with a large, national mortgage brokerage. At the time, I did not understand mortgages or know how to make good decisions about how to choose the right loan. I was also naïve and a bit too trusting.

The mortgage company I worked for trained all of its employees to believe that adjustable rate, interest only mortgages is an excellent product. In fact the company focused soley on teaching its employees how to sell ARM's. The value of this product was ritualistically taught and promoted to the point that no one ever questioned that maybe, just maybe the adjustable rate mortgage is not for everyone.

For many homeowners's the ARM was an answer to their prayers. The loan originators were trained to market this product by only showing the customer the perceived benefits of it. The loan originators were not taught that there was a down side to the product and so the customers were never made aware of this.

As a result, naïve loan originators sold adjustable rate, interest only loans to naïve customers. Some customers were able to get more for their money, a lower payment, and a greater feeling of prosperity. Others were able to buy homes they would otherwise not qualify for due to their debt to income ratio. Because loan originators only get paid when they sell mortgages, and borrowers were tempted with a higher standard of living, both sides were all too willing to gloss over the details and do the loan.

There's no question that it's the consumers responsibility to understand what he or she is buying and for this reason, he or she is responsible for not performing their due diligence. However, this doesn't let the lenders off the hook. It is unethical to send poorly trained employees into the world, selling mortgage products they don't understand to people who don't understand them, and this is exactly what happened.

To me, the buck should stop with those who have the most knowledge, wisdom and understanding about the matter at hand, because their ability to influence and guide the outcome is superior to those with less knowledge, wisdom, and understanding.

Most people are not knowledgeable enough to understand the subtleties of every industry he or she interacts with. So, rather than trying be an expert at everything, people normally develop relationships based on trust with others who provide products and services.

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