Wednesday, April 03, 2013

Pushing the Heroin of Cheap Mortgages

Glenn Reynolds (aka Instapundit) asks "What could go wrong?" with the Obama administration pushing banks to make home loans to people with weaker credit.

More food for thought from previous posts on the distortion of the market place:

America: What a Country!?!?!?...Welfare Payments Can Be Used to Qualify for a Mortgage:
..Sources of Income: In addition to primary employment income, Fannie Mae and Freddie Mac will accept the following as valid income sources: overtime and part–time work, second jobs (including seasonal work), retirement and Social Security income, alimony, child support, Veterans Administration (VA) benefits, welfare payments, and unemployment benefits...

America: What a Country!?!?!?...Update:
A representative for the Federal Reserve Bank of Boston has pointed to this specific statue in the U.S. Code as the law allowing for such a policy: United States Code: Title 15, 1691 (From the Equal Credit Opportunity Act):

§ 1691. Scope of prohibition(a) Activities constituting discrimination

It shall be unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction—
(1) on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract);
(2) because all or part of the applicant’s income derives from any public assistance program; or
(3) because the applicant has in good faith exercised any right under this chapter...

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