There were warnings about the possible devestating impact of adjustable rate mortgages and low down payments, but few listened.
“Expect fallout, expect foreclosures, expect horror stories,” California mortgage lender Paris Welch wrote to U.S. regulators in January 2006,
Federal regulators were especially concerned about mortgages known as “option ARMs,” which allow borrowers to make payments so low that mortgage debt actually increases every month. But banking executives accused the government of overreacting.
AP IMPACT: They warned us, but US eased loan rules [SF Gate]
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