[fhlh]

The deterioration of homeowners' ability to keep up with mortgage payments will add oomph to calls on Capitol Hill for new regulation of mortgage lenders and brokers. "There is considerable discussion by incoming House Finance Committee Chairman Barney Frank [D-Mass.] to enact a predatory lending law for these mortgage lending problems," says Keith Ernst, senior policy counsel for the Center for Responsible Lending.

Ahhhh yes.. get the government involved to save us from ourselves...

[djf]

Well, if one wants to be charitable, they can say it was loose lending policies that led up to this.

The lending that happened amounted to a kind of bidding war between the institutions. A house worth 100K in a certain market suddenly zoomed to 200K in short order. And there was nothing to justify the increase save what the institutions were willing to lend on it.

So now because of these policies, literally millions of people face foreclosure and possible bankruptcy. Years of destroyed credit.

And the lenders sit back, after having the sheriff toss the schmucks stuff on the sidewalk, and say "Don't blame us!" "They knew all about it!" "It's not our fault!!"

And you know what? Some of the lenders might take serious financial hits because of it. And before you can say "cheese", the gummint will be in there filling up there back pockets like the S&L debacle.

Meanwhile, the schmuck is sitting in a Barcalounger on the sidewalk, with basically a negative credit rating now, without a pot to whiz in.

And the bankers and Wall Streeters will still be eating lobster and flying first class.