Thoughts on the new mortgage regs
But it's not like any type of loan was banned. And while more pre-closing disclosure documents warning about the risk of these "Frankenstein Financing" mortgages is nice, customers are already bombarded with page after page of disclosures when they take out a loan. Are they really going to benefit from being given even MORE?
Lastly, there's the timing issue. Everyone who follows this industry, as I do, has known for a long time that too much high-risk, B.S. lending was going on. Fraud? Rampant. Outright lying about income, assets, owner occupancy status? It's everywhere. Why is it NOW, a full year after the housing market peaked (I put that at July 2005), that we're seeing the regulators step it up? I'm not really surprised, just disappointed ... because it's too late to prevent a lot of ruined lives.
Anywhere, here's an AP story covering the regulations.