WASHINGTON ( TheStreet) -- Mortgage brokers, many of whom originated deceptive loans that helped trigger the 2008 financial crisis, are still supervised by a dysfunctional patchwork of state and federal regulators.A federal lawsuit against a leading mortgage broker last week exposed a gaping regulatory hole that will persist as long as Senate Republicans block appointment of a chief for the new consumer agency. The U.S. Consumer Financial Protection Bureau created by the Dodd-Frank legislation can't examine or supervise mortgage brokers until it gets a director confirmed by the Senate. Former Ohio Attorney General Richard Cordray was nominated in July, but a Senate vote has not yet been scheduled. Senate Republicans headed by their leader, Mitch McConnell of Kentucky, and Richard Shelby of Alabama are playing Russian roulette with borrowers' homes and assets by threatening to block Cordray's nomination. If he were to be confirmed, the consumer agency would likely have the focus and independence to prevent a massive decade-long fraud like that allegedly conducted by Allied Home Mortgage Capital Corp. "These crises can be averted," said William Black, an economics and law professor at the University of Missouri in Kansas City who was a senior thrift regulator in the 1980s. "But if you create regulatory black holes, mortgage brokers will just move to areas where regulation is weakest." The hazards of the status quo were highlighted by the federal civil-fraud complaint last week against Allied, which billed itself as the nation's largest privately held mortgage broker. The allegations, if true, show how a determined broker can easily sidestep disengaged and unconnected regulators. Since 2003, three federal agencies and more than a dozen states cited or settled with Allied or a related company for misconduct, according to a 2010 ProPublica story. Yet Allied chugged along. Thousands of other mortgage brokers committed similar deception about loans they were peddling in the run-up to the financial meltdown. In 2005, many of the $1 trillion in nonprime loans were handled by mortgage brokers, who were paid by lenders to prepare loan paperwork for borrowers, according to the Financial Crisis Inquiry Commission report.