QualityStocks'  Instablog

It's an inconvenient reflection on America's biggest financial institutions and the agencies designed to watch them. The real estate bubble and eventual crash brought a slew of hearings, all pointing to the same picture: People in high places not doing their job. The bubble of exploding housing prices proved too tempting for many in the business, leading to mortgage investment decisions that were based on price speculation instead of the borrower's ability to pay or credit worthiness. Loose financing accelerated the fire, drawing in more investors and more buyers.

Like any bubble-based market fueled by speculative greed, as long as money flowed in and prices went up, the illusion had legs. People got rich, which drew in still more people and more money. Speculative individual loans became speculative packages, until much of the industry was resting on a house of cards. Of course, as always happens, the flow of funds eventually slowed, and the market began to realize that the emperor had no clothes. Those who had gotten in were faced with the problem of getting out, and the eventual stampede and collapse took much of the economy with it.

The result of it all has been, and will continue to be, a spate of new regulations designed to ensure that housing loans are based upon sound lending practices versus speculation, although some would say that the problem was never the lack of regulation but rather a lack of enforcement.

Whatever the conclusion, Loans4Less.com, a successful online mortgage broker based in California, finds itself sitting comfortably above the turmoil. As a mortgage broker focused on "A" paper loans, the company is poised for strong growth and is recognized for carefully avoiding the risks of the subprime market. "A" paper loans traditionally require a high credit score, full documentation of income and assets, a low debt-to-income ratio, and a significant down payment. In effect, Loans4Less approaches the market in exactly the way that it should have been approached by all before the housing bubble had a chance to form.

For more information, visit Loans4Less.com

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