Looking Out for the Homeowner

Consumer Protection Looks More Like Common Sense

By Mary Kane 10/16/08 6:01 AM

Imagine applying for a mortgage in a few years and finding out it works like this: You are offered a standard 30-year fixed-rate loan. The only route to a different mortgage — a riskier one, say, with an adjustable interest rate — is to opt out.

You’d have to say “no,” the way some employees decline if they decide not to contribute to an employer-sponsored retirement savings account. Otherwise, you’re automatically enrolled.

The opt-out mortgage is one of many ideas now floating around to regulate the financial-services industry. With the financial landscape radically changed by government intervention and partial nationalization of the nation’s largest banks, it’s clear that the deregulation phase of financial services is over.