We’ve all read about all the hundreds of billions of dollars lost by lenders and investors on mortgages made during the housing bubble that should never have been written in the first place due to low rent lying: Mortgage brokers telling buyers to make up jobs, income, spouses, and forget about other houses they own, previous bankruptcies, and the like. Appraisers adding 30% to values. Buyers claiming spouses they weren't married to, etc. etc.

I got to thinking: ”If Procter & Gamble were in the mortgage industry, would they let themselves be taken to the cleaners by countless cases of petty fraud, the way Lehman Bros. and Washington Mutual and Fannie Mae and so many others did?”

No way.

If P&G were in the business of giving out a hundred billion in mortgages or buying hundreds of billions of other people’s mortgages, they would hire market research firms to monitor trends in the mortgage marketplace. They’d pay survey research firms to call up recent homebuyers to see how onerous their payments were turning out to be. They’d hire focus groups firms to talk to buyers and realtors and mortgage brokers to spill the beans about their business. They’d hire "mystery shopper" firms to pretend to be in the market for houses and see if any of the professionals were pulling any funny stuff. They’d have appraisers on their own payroll who were paid the same no matter how low they appraised the houses.

Procter & Gamble would spend the money to monitor the trillion dollar mortgage business as closely as they monitor the billion dollar toothpaste business.

But I’ve never heard of anybody being paid to monitor the mortgage market for monkey business. Have you?

By the way, if you think there might be a business opportunity here, go for it. Of course, even better, figure out what’s going to be the next Bubble after mortgages (alternative energy?) and set up systems that can help investors not be such damn fools in the future.