New Mortgage Lending Rule Intended to Protect Borrowers May Hurt Self-Employed - Yahoo! Finance

New Mortgage Lending Rule Intended to Protect Borrowers May Hurt Self-Employed - Yahoo! Finance

Just FYI: This lending law, which is supposed to be applied in 2014, is a law that will make sure that borrowers must be able to pay loans they get for house purchases back. Only problem is there was a law in existence, in 1989 that was supposed to do the same thing and yet George W. Bush ignored the law completely in the housing bubble.

I wrote about this law and here is an excerpt:

Turns out, if you make a loan to a person and don't adequately establish that he can pay it back, it is against the law.  This law is called the Financial Institutional Reform, Recovery and Enforcement Act of 1989 (FIRREA). The law requires that banks lend to people who are able to pay the loans back.
One could say that W's failure to enforce this law was the direct cause of the housing bubble in the last decade. 

The Yahoo title is about as dumbed down as it can get. Nobody cares about hurting the self employed if it means the law is followed as it is supposed to be followed. If you can't show you can pay back a loan, the law says you should not get one, period!

UPDATE: I made a comment at Patrick.net where I placed this article for discussion. Here is the statement:


...the abuse was made of these stated income loans. And the thing is, the state income loans in the UK were abused before they were applied to the masses here in the housing bubble. The intent is clear, if you want a housing bubble you abuse stated income, self certifying, liar loans.
The point is, and Henry Blodget does not understand, that the way to blow a premeditated housing bubble is to abuse stated income loans. That is the method of operation. It should be a criminal offense for the banking cabal to be permitted to ignore laws and apply stated income loans to people who should not get them. 

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