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  • The Failed Subprime Clampdown [View article]
    Keep in mind that there WAS one protection in place. Fannie, Freddy, FHA, HUD, FmHA and banks all required PMI - private mortgage insurance - on all loans with less that 20% of the borrower's money down. There should have been PMI on all the subprime mortgages.

    Unscrupulous lenders, mortgage originators and processors and closing agents pushed combo loans - 20% high interest loan for the "downpayment" plus an 80% low interest loan - to avoid the added cost of PMI. They simply did not follow the rules and thereby took away the protection that was required by law.

    The single most disturbing thing about the subprime mess is that the Federal and States' Attorneys General are doing NOTHING to the folks who made and closed subprime loans without the required PMI. They should ALL be headed for or in jail and should have reparations requirements for when they get out.

    Heck, they are all LICENSED by the states and their licenses haven't even been pulled. They're all still out there, scheming how to get around whatever new regulations may be made. Our governments are BROKE. They can't protect us. They're not even trying.
    Dec 03 13:20 pm |Rating: +1 0
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