Neither a subprime nor duped borrower be

It took more than one untidiness to make the mess in subprime mortgages. There were borrowers who used their houses as checking accounts and investors in boxes of loans who did not look into the box.

But at the center of this dog's breakfast was the mortgage broker, who was paid on commission to make loans he immediately passed on to another investor. Everyone relied on the mortgage broker, who legally works for himself.Two bills in the Legislature aim to modify that, and deserve passage.

The first, Senate Bill 6381, sponsored by Sen. Brian Weinstein, D-Mercer Island, would make mortgage brokers agents, or fiduciaries, of the borrower. That is how the law regards, for example, a stockbroker — and a mortgage broker often handles much bigger sums than a representative of Wall Street.

Weinstein's bill says the mortgage broker must disclose to the borrower all payments he receives for making the loan, and "shall not compromise a borrower's right or interest in favor of another's right or interest."

The second, Senate Bill 6452, sponsored by Sen. Rodney Tom, D-Bellevue, is more specific. It would require that the mortgage broker disclose any yield-spread premium, which is a payment from the lender to the broker based on the difference between the interest rate the buyer qualified for and the one he actually got. These payments have been used to steer creditworthy borrowers into loans with interest rates unnecessarily high.

Neither of these laws would prevent all cases of victimization. Stockbrokers have such laws, and every year there is some broker taken to task for churning or some other sharp practice. But these laws would prevent some abuse, and they would make it easier to punish the abuse that occurred.