Tuesday, November 06, 2007
Risky Mortgage Loans - Root Cause
Why am I not surprised at this?
For all the good that Congress might do, their political haste and shortsighted laws create some really big problems.
We should be really nervous when they set out to "fix" something...
For all the good that Congress might do, their political haste and shortsighted laws create some really big problems.
We should be really nervous when they set out to "fix" something...
The Wall Street Opinion Journal discusses this example:
"Throughout the 1980s and '90s, Congress prodded, even strong-armed, banks into making more mortgage loans to low-income and minority families. Washington enacted anti-discrimination and community lending laws with penalties against lenders for failing to issue riskier mortgages to homebuyers living in poor neighborhoods or with low down payments and subpar credit ratings. And so it was that the modern subprime mortgage market was born.
Now, and for a variety of reasons, some two million of those loans have gone sour, and the same politicians are searching for villains."
