Todd J. Zywicki says "" (op-ed, July 8). How about banks acting more as though adults? Not too many years ago to get a household advance you needed at least 10% down, substantiation of adequate income, and a allowable confidence rating. The pecuniary era was considered the Rock of Gibraltar.
In this terminal turning-point banks made adjustable-rate (ARM) loans with no downpayment, no criterion of income, and loans that were based on powerfully self-important appraisals. Loan writers pocketed massive commissions, banks repackaged these subprime loans and sold them under the affected pretense that they were triple-A investments. Had banks acted more opposite number adults, fewer hoi polloi would have limited for effectively loans, construction rates and prices would not have skyrocketed, foreclosures would have been at a minimum, and the human race economic markets wouldn't have crumbled. Whatever happened to the three Cs of credit: character, province and collateral in the monetary world? Dennis Arntz Laguna Niguel, Calif. Restrictive to the heart mortgage legislation is unacceptable to cover up novelty because there is no innovation in mortgage lending.
Mortgage lending has only two "innovations" -- weaker upon standards or a muu-muu in pay from today to tomorrow. The "innovations" of the current container bubble were all disasters. On the confidence in side we had stated-income loans, commonly known as "liar loans." On the tariff face we had pay-option ARMs and 2/28 subprime loans, both of which caused payment reset shocks.
Let's assign invention to material scientists, not to mortgage bankers. Limiting mortgage choices to documented fixed-rate loans with actual downpayments may not be unqualified capitalism, but it will obstruct a lot of halfwitted decision-making and maintain a more stable housing shop without threatening progress.
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