08/01/2011 12:56 pm ET Updated Oct 01, 2011

It Must Be Nice to Be Gretchen Morgenson

Ms. Morgenson, one of the New York Times' Sunday business writers, sees the world in black and white. Apparently she does not believe in hues.

Her latest column (Sunday, July 31) is an example: "Some Bankers Never Learn."

In this column she vilifies the mortgage industry (as she always does). Her one-sidedness shows a lack of understanding of the real-world lending business.

First, there were many reasons for the housing bust. Yes, one was over-aggressive and unethical lending practices. But, another was consumers who took neither the time nor the interest to educate themselves. And another was borrowers who knew perfectly well what they were doing -- intentionally borrowing over their heads (taking knowing risks) in the hope that housing prices would continue to rise. And another was artificially low interest rates, as Chairman Greenspan tried to juice the economy after the dotcom bust. And so on, and so on. For Ms. Morgenson to single out just the lenders is disingenuous.

Second, her view that the mortgage lenders are back at crazy again displays a lack of real-world knowledge. Ms. Morgenson, perhaps you should try to get a home loan right now. Then report back on whether you think the mortgage industry is back where it was before the crash.

I believe you will find that just the opposite is true: in fact, lenders are being overly conservative and making borrowers' lives miserable. By the way, that is, in my view, one reason the housing market continues to stall. Since three quarters of home buyers get a mortgage, the availability of debt is a huge part of when and whether the housing market recovers. Ultra-cautious lenders are not helping.

Third, Ms. Morgenson's "eureka" moment -- regulators found that loans with a 20% or more down payment and certain income caps tend not to default -- is Kindergarten stuff. Every person in the real estate industry knows that. The issue, however, is how to find ways to make loans to young people, or the self-employed, or immigrants -- who may not have amassed the requisite 20% down payment or established a steady income.

We have big issues in this country. Issues that require serious thought, discussion, and compromise. To paint the picture in only black or white does everyone a disservice. Ms. Morgenson, how about using your pulpit to educate -- to help people understand the plusses and minuses of various loan choices -- and then give people credit for the ability to make decent decisions.

Jim Randel is the founder of the Skinny On series and author of the award-winning book, The Skinny on the Housing Crisis.