Archive for July 14th, 2008
The end of liar loans?
A Thomson Financial article today states that The Federal Reserve was to set new regulations to help control the subprime lending market.
The rules would force lenders to verify income before approving a mortgage.
Some will see it as the end of the mortgage crisis. After all, it only took the failure of Bear Stearns and IndyMac, along with the near and soon to come collapse of Fannie Mae to send the message that something had gone awry.
When I push the snooze button too many times, I end up late or ill prepared. Quite often both. The fact is that The Federal Reserve has been asleep and pushed the snooze button too many times They are now ill prepared to face this fiasco.
The “Truth In Lending” regulations would apply to “virtually all” subprime mortgages, and would “generally exclude” prime loans.
The “generally” part here is what I question. Some mortgage brokers have been experts at bending the truth with the liar loans and my prediction is that they will try to maintain status quo for a long time to come further destroying the Dollar.
This will not stop the con artists wanting to broker mortgages, it’s only another obstacle they have to get around of.
