Monday, December 01, 2008

Government warned of mortgage meltdown

Posted by Plus Master at 7:12 AM
 

The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.

"Expect fallout, expect foreclosures, expect horror stories," California mortgage lender Paris Welch wrote to U.S. regulators in January 2006, about one year before the housing implosion cost her a job.

Bowing to aggressive lobbying -- along with assurances from banks that the troubled mortgages were OK -- regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way.

Read the full story here on CNN.Com.
POSTED IN Subprime Fallout

1 Responses to "Government warned of mortgage meltdown"

PLUS Bad Credit Repair Says: December 11, 2008 (11:12PM) The rise to prominence of the payday loan industry is being blamed for the increasing number of bankruptcies. This is not exactly logical thinking. Paige Marta Skiba, Assistant Professor of the Vanderbilt University Law School, provided research that demonstrates the higher prevalence of those who applied and were approved for a payday loan and bankruptcy. This means that people who need money are more likely to go bankrupt. Oh, gosh – that is some groundbreaking research there. That's like saying that people who live in the desert are more likely to die of thirst. Of course they are – they live in a desert! There isn't a whole lot of water, and that's what makes it a desert! Poor financial planning and budgeting makes for more bankruptcies, not taking out payday loans. Its like any other form of credit – you take it out, and you have to pay it back, and be responsible. Perhaps some research could be done to link that to bankruptcy, and not consumer credit options like payday loans. Click here to learn more on Payday Loans.
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