Posts Tagged ‘liar loans’
Part of the reason for singing the mortgage blues today is our track record of the years 2000 through 2006. As consumers refinanced mortgage coompanies started searching for those who would refinance again and again. Non-bank financial institutions and shady lenders looked for new customers, and subprime liar loans were born.
First-time homebuyers have originated less than a tenth of all subprime loans since 1998, according to a 2007 Center for Responsible Lending analysis. As recently as 2006, just over half of all subprime loans were refinances of existing home loans. The expected foreclosure toll from these loans will outpace the ownership gains by nearly a million families, the center estimates.
Government officials have stepped up an investigation into whether crimes were committed when the subprime-mortgage market collapsed. Although a task force was announced in January this is a new effort. Primary focus will be on non-doc and liar loans, what the lenders knew about them, and how they were packaged and sold on the secondary market. Many of our readers sent reports about funding of illegal loans.
One point is perfectly clear after the subprime debacle, which is the need for federal-level regualtors that will actually do something. Finger pointing is frustrating for consumers and mortgage holders. Recently we received a report of a mortage holder who was bounced from the OCC to the FTC, later to be told that the FTC gathers complaints but does not take action on individual complaints.