Anyone who thinks otherwise, ever, is a fool. Not just regarding lenders or brokers, but for the pundits and reporters, politicians, and other varied axe-grinders involved.
The model for mortgage delivery is broken, and I don't know if it will be fixed soon. It will undoubtedly involve more regulation, probably mandatory licensing and professional standards such as exist for financial advisors.
It will also involve different thinking on the part of borrowers. Mortgages were once a commodity and were shopped for and obtained like commodities. Mortgages are no longer commodities, because of the size of mortgages today they are financial instruments.
What advice do prospective borrowers receive from so-called "consumer advocates?"
Shop for the lowest fees...that's right. As a mortgage broker/banker I had one fee I controlled, that was origination. Everything else was a second party fee passed through.
Many of those borrowers now being foreclosed undoubtedly had very low fees on their transaction...perhaps they should have been paying attention to something else.
When my wife and I refi’ed our home in 2004 we shopped around with over 12 institutions. Also we had an attoney read over the paperwork before we signed it.