Friday, June 08, 2007
Have your cake and eat it too
Consumer advocates, who see a rare opportunity to strengthen lending laws, say that represents a misguided optimism, and point to housing statistics as proof that action is warranted.
The National Association of Realtors said Wednesday it expects sales of existing homes to drop 4.6 percent this year to 6.2 million while the median home price is expected to fall 1.3 percent to $219,000. It would be the first annual drop since the trade group began keeping records in the 1960s.
The foreclosure rate nationwide is rising at an annual rate double that of two years ago. Nearly 2 million adjustable-rate mortgages are forecast to reset at higher rates over the next two years, suggesting the foreclosure rate has not peaked.
If the prospect of soaring foreclosures doesn't motivate Congress "to take firm and deliberate action, I don't know what on this God's earth will," says John Taylor, president of the Washington-based National Community Reinvestment Coalition, which advocates for low-income and minority groups.
. . . .
Federal lawmakers and regulators say they are balancing how to make sure high-risk borrowers can still get loans against efforts to rein in abusive lending practices.
When abusive lending practices are defined as lending to high-risk borrowers at a rate that enables a bank to make their money back after a lot of them default. Note to regulators - when high-risk borrowers default, that's part of the whole high-risk thing. Note to activists - . . . probably not worth it.