Treasury Secretary Paulson had some interesting statements in a Reuters.com article today.
Let's look at the excerpts:
Paulson said he wanted "strong nationwide licensing standards" for mortgage brokers as part of a bid to ward off future housing crises and reassure investors.
From a broker perspective I have no problem with national lending standards. However, national broker lending standards could not have warded off this housing crisis. The idea of reassuring investors is interesting, as it is the lenders who set the lending standards for the loans that they are willing to buy and sell - not the brokers. Brokers merely abide by the lending standards & programs set forth by the lenders.
Paulson said state and local regulators need to toughen oversight of all mortgage originators. Sloppy lending practices including loans made to homeowners with no requirement of proof of income are widely blamed for a soaring tide of foreclosures, especially among so-called sub-prime mortgages held by people with the shakiest personal credit.
Ahh stated income! I have never liked the stated product. It should probably be called overstated! Stated programs could efficiently serve a certain portion of homeowners & home-buyers and perform for the investors that offer them. However, I think stated income programs that allowed for increasingly lower credit borrowers just went too far. It's not a big surprise that these loans aren't performing. It's more of a surprise that lenders were pushing this junk.
It seems as though the blame game will continue until this mess works itself out.
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