| Will the Congress come to the rescue of consumers | | | | Beazer Homes, one of the many homebuilders that |
| to initiate reform of home loan mortgage lenders? It | | | | started or increased their mortgage lending business to |
| may. The Democrat-led Congress may submit | | | | facilitate the buying of their homes. However, |
| legislation to place stringent measures to curb abuses | | | | allegations are now surfacing from former |
| within the mortgage industry. | | | | homeowners who have defaulted on their mortgages |
| The mortgage industry includes not only mortgage | | | | that some builders inflated their income or altered |
| lenders, mortgage brokers, but also home builders who | | | | some material facts on the mortgage applications in |
| own mortgage companies, Wall Street, and other | | | | order to get them approved. In order to get homes |
| mortgage security investors. If stringent measures are | | | | sold many financially unqualified people were approved |
| implemented by Congress, it will protect future | | | | for mortgages and other home loans such as |
| consumers from being exploited. However, it may | | | | mortgage refinancing. |
| have an ancillary effect in that it may protect | | | | The housing market boom of the recent five years |
| purchasers of mortgage backed securities. The recent | | | | was due to many diverse factors. Banks, mortgage |
| past has seen unmitigated mayhem in the market. | | | | companies, and homebuilders relaxed their lending |
| Countrywide Financial's second quarter profits dropped, | | | | standards and flooded the market with mortgage |
| leading to a fall in share prices to a 52 week low on | | | | loans, along with loans to people with questionable |
| July 24, 2007. Its second-quarter net income dropped | | | | credit. Unlike before adjustable rate mortgages were |
| to $485.1 million from $722.2 million, a year ago with | | | | doled to increase their bottom line. The folks on Wall |
| revenue falling 15% to $2.55 billion. | | | | Street stimulated this reckless mortgage lending |
| This week American Home Mortgage, a large national | | | | behavior by continuing to buy huge quantities of home |
| mortgage lender announced that it may not be able to | | | | loans for repackaging as securities. Many of these |
| fund current inventory of home loans in excess of | | | | mortgage backed securities contained risky subprime |
| $300 million dollars, sending its stock value plummeting | | | | mortgages. |
| by 90 %. But the subprime mortgage disaster is | | | | Now that the housing bubble has burst, rising |
| affecting even prime loan lenders and borrowers. | | | | foreclosure rates, oversupply of homes, increasing |
| Wall Street is also reeling from the rise in foreclosures, | | | | mortgage rates, less home buying demand, and the |
| oversupply of homes, subprime mortgages, defaults, | | | | negative residual effects upon the economy is leading |
| and more. Nevertheless, Wall Street is complicit along | | | | to closer examination by government into the role of |
| with home builders and mortgage lenders in creating | | | | mortgage lenders, home builders, and Wall Street. |
| this problem. | | | | |