The Mortgage Meltdown Isn’t Just A Subprime Issue
The idea that the mortgage availability problem is somehow a “subprime” issue, involving only those with minimal credit, is just not so. Why then have foreclosure numbers exploded? The answer doesn’t just concern subprime loans, it concerns the entire mortgage system, a system where loan officers are not required to get the best rates and terms for borrowers, overcharging borrowers is perfectly lawful and federal regulators failed to protect the public interest. As the Federal Reserve has just reported, it’s not just subprime loans that have caused lenders to scurry. Look what the Fed says is happening with jumbo loans, big mortgages for those with solid credit. The bottom-line reality is that we have a lending system which needs to be modernized. Bills now moving through congress would require loan officers to be licensed, loans to be documented, lenders to be responsible and borrowers to be informed. Most importantly, lenders would finally have an obligation to work for the best interests of borrowers.
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