Quote:
Originally Posted by yys
Anyways, your whole system for giving people mortgages in the U.S. is B.S. You should make people put money down when buying a home. If they don't have 20% they should have to take out mortgage insurance like we do in Canada. These LTV100%+, interest only, no income, no employment, 40 year term mortgages that companies were allowed to sell with the backing of Fannie and Freddie were a recipe for disaster.
Why are people surprised that Dem's have their finger prints all over this mess just like the Repubs? They are well known for believing it is your god given right to own a home and like to force companies to lend to low income individuals.
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Actually, PMI (primary mortgage insurance) is required for non-conforming loans below a minimum LTV. Hence, the AIG problems.
But your observations are correct - the lending practices are bad. But, that's the direct result of the influence of the US CONGRESS forcing funding companies to offer those types of loans.
It should not be the government that sets lending standards. That's the right of private business. If some business choose to take that risk - then they reap the spoils and the spoilage. That's business.
Where the regulations come into play - is that the government has the right to force PUBLICLY traded companies to release TRUE and CORRECT financial statements listing their complete holdings and the RISK LEVEL of those holdings. But thats it! And that should ONLY apply to PUBLICLY traded companies - as the general shareholders need to be protected. But that't it! It shoudl stop there!