Interest Rate Roundup

Tuesday, February 20, 2007

Fed's Bies speaks out about mortgage risk ... again

Several headlines from a speech on high-risk lending by Federal Reserve Board Govenor Susan Bies are coming over the Bloomberg right now ...

"Bies says regulators concerned about mortgage underwriting."
"Fed's Bies calls subprime mortgage market 'very problematic'"
"Bies points to 'transaction-based mentality' among lenders"

Bies also spoke out in mid-January on this topic. I posted some comments about that address at the time.

The fact of the matter is, the Fed and other banking regulators are a day late and a dollar short. Rather than just introduce and debate weak-kneed "guidance" about high-risk lending -- starting back in December 2005 -- they should have done all they could to crack down on it. Because they didn't, we're experiencing the worst mortgage delinquency and foreclosure rates on high-risk loans in years.


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