Gov't Regulation of Subprime Lending

[profette_IHB]

<p>Paul Krugman has an interesting column on regulating the subrime lenders. Congress is making noise about moderate regulation of the subprime market, but with all the campaign donations from the mortgage market, what are the chances?</p>

<p>From the <a href="http://www.nytimes.com/2007/10/26/opinion/26krugman.html?_r=1&hp&oref=slogin">NY Times</a>: As Barney Frank, the chairman of the House Financial Services Committee, put it in a recent op-ed article in The Boston Globe, the surge of subprime lending was a sort of “natural experiment” testing the theories of those who favor radical deregulation of financial markets. And the lessons, as Mr. Frank said, are clear: “To the extent that the system did work, it is because of prudential regulation and oversight. Where it was absent, the result was tragedy.”</p>

 

[No_Such_Reality_IHB]

<p>And if we let it run it's course, it will self correct. Eventually, everybody will realize that the Big Nanny doesn't exist and new financial 'inventions' will be considered high risk until proven otherwise.</p>

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[graphrix_IHB]

Here is the <a href="http://www.urbaninstitute.org/UploadedPDF/411542_Gramlich_final.pdf">Gramlich report from the 2007 Jackson Hole</a> conference that Krugman is referencing to.

 

[lawyerliz_IHB]

<p>Gramlich report--oh, for crying out loud.</p>

<p>The minorities are getting crushed, and this is what is getting offered?</p>

<p>Only 12% are getting foreclosed, so 88% are more or less ok. Geesh. I guess the author thinks were are at the bottom. . . .</p>

<p>The one good suggestion is buy these properties up cheap. Then, I think the community organizations should rent with an option to buy.</p>

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