Smalltownbanker

NYT - 'Prime Loans About to Implode': Where's the Evidence?

The broker in California lives in a small and ugly World right now but the fact is the rest of the nation is not in the same condition as California, Florida, Nevada and Arizona. For the reasons pointed out by Tom above the GSE prime exposure to California is low.

Stated income loans were improperly used and needed to be restricted and they have been.

Downpayment requirements were too lax and needed to be increased and now they have been.

Option ARMS should never have been offered to most borrowers but they were offered to everyone and now no one can get them.

Jumbo loans should require significant liquidity to obtain and now they do. Why should you lend a $500,000 or more to someone who can't even pay the closing costs for the loan.

Now all we have to do is get rid of all the loan officers, brokers, banks and lenders who would go back to what they were doing in 2006 if allowed. If we do not they will be back as soon as the housing prices stabilize pushing the envelope, creatively stating income, dreaming up assets that don't exist and putting people in loans they should never of signed to begin with.