Friday, October 06, 2006

Inman News - Are these Regulations or Suggestions on Mortgage Banking?

Nice going to Matt Carter of Inman News for calling 'em as he sees 'em on several issues. This one is about the federal regulators' nebulous wording on new underwriting and disclosure guidelines for "exotic" mortgages.

The word "should" appears in the guidelines 102 times, Guttentag notes. Because they only say banks SHOULD do this and SHOULD do that, the guidelines are "essentially a theological document" Guttentag says, "designed to shield the agencies from the wrath of God (Congress) if the flood should come by demonstrating that the agencies did all in their power to stop the sinful behavior that brought it on."

Here in the Hamptons, a great majority of mortgages are "exotic", although not usually taken-out by people who can't afford them. See:
Inman News - Real Estate News and Advice for Buyers, Sellers & Investors

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