Monday, January 14, 2013

White House: Mortgages we can "Trust"

Assuring Consumers Have Access to Mortgages They Can Trust | The White House: In the run-up to the financial crisis, we had a housing market that was reckless about lending money. Lenders thought they could make money on a loan even if the consumer could not pay back that loan, either by banking on rising housing prices or by off-loading the mortgage into the secondary market. This encouraged broad indifference to the ability of many consumers to repay loans, which dramatically increased mortgage delinquencies and rates of foreclosures.
The White House is lying.

There was nothing reckless about lending money in the housing market - every loan was underwritten and sold. By definition, every loan in the system was solid. The system said so.

The fraud was on the other side - the ratings, bonds, and packaged loan products (CDS, CDO's), not the consumer side. This is what The WH is lying about.

Lenders knew they could make money because they were being paid to underwrite/generate loans, not to service them. And they knew they'd be bailed out.

WE DON'T NEED NEW BANKING LAWS/REGS - THE OLD ONES WERE NEVER ENFORCED.

Notice the WH's statement makes no mention of criminal proceedings against any banking entity? This is complete patina - another capitulation to the nation's banking sector.

I hate it when they do this - it only makes my Teabagger/goldbug friends look right.

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