As much as I hate regulation, this may not be a bad thing. Keep in mind that a lot of people who got these loans ran screaming to the press and anyone else who would listen how they got “suckered” or “hoodwinked” and didn’t realize that an “interest only loan” would require principal payments at some point. We live in a nation of children who can’t take responsibility for themselves.
I guaran-DAMN-tee you these same people will, in a year or two will be bitching to the press that the banks are racist or sexist or homophobic or WHATEVER because they don’t qualify for a loan.
It won’t matter to the moron media that the banks are following rules.
As for the people who were screaming they were “suckered”, they were simply repeating what their leader (in the White House) and his Party were saying in numerous speeches.
Looking at it from the other side, if these new government dictated regulations towards real estate financing are so good, why not apply similar rules to auto loans, credit cards, student loans and all business loans?
This is a terrible thing.
The Fed Gov't has gone from over-regulating in one direction to over-regulating in the other.
You say people can't take responsibility. The problem was the Government was MANDATING that banks push sub-primes. It was the Gov't who was responsible not the people.
Now the Gov't is saying banks should NOT push loans.
Give banks freedom to loan where they will. Banks don't like to lose money; it's Fed mandates that force them to do just that and the consumer suffers from tighter credit. Banks are best able to gauge what local conditions are like and how much money they can safely loan out and Fed regulations screw that up for banks AND the consumer.