FREE ROOM WITHOUT BOARD

Subprime blame game: Some 2.4 million homeowners are in danger of losing their homes. Critics are pointing their fingers at who is responsible - here are the main targets:

1. Mortgage brokers
   The charge: Brokers steered borrowers to loans they couldn't afford.
2. Appraisers
   The charge: Inflated appraisals put home buyers in immediate jeopardy.
3. Regulators
   The charge: Government agencies such as The Federal Reserve did not use the authority granted them under the Home Ownership and Equity Protection Act to prohibit substandard lending practices.
4. Lenders
   The charge: Lenders relaxed underwriting standards far too much and made loans they should have known would not be repaid.
5. Wall Street
   The charge: Investors bought securitized loans with no regard for whether they met underwriting standards.
6. Real estate agents
   The charge: Salespeople fed the frenzy.
7. Readers write in: Borrowers are to blame!

This was an issue between lenders and borrowers. And, no one should be upset. Lenders and their agents made a ton of money and most "blew" it into the economy. Loan agents don't save money. And, borrowers? Some didn't even make the first payment. What a racket! They lived rent free for 4-7 months until being foreclosed. How could they complain about that? Many are losing a house that they didn't really own. So, think of them as renters who have to move on now....

All this activity went on right under the collective noses of all levels of regulators. Meaning? They were ok with it.

On March 25th, I proposed HERE that banking regulators adopt two very important tenants from the securities industry: "KNOW YOUR CLIENT" & LOAN "SUITABILITY".

Housing Bubble and Real Estate Market Tracker from SA for 4/9

Buying a House in California May Not Be So Crazy