This article from the New York Times describes new guidelines that lenders will need to follow in order to prevent another financial crisis caused by the housing bust. This article made me a bit upset because it really makes to much sense. All of the rules they plan to put in place seem like great ideas that really should have been in place before. This is reactive legislation. I want to see the day where we as a nation pass laws more proactively and prevent such major problems from ever occurring. There definitely was some people out there that saw the collapse coming.
That being said, do you think these proposed changes to the rules of loans will prevent another collapse of the housing market? What more needs to be done?
Honestly, I'm shocked that we allowed people to get a loan without any documentation in the first place. I'm not sure that I agree that banks should receive a "safe harbor" if they follow these new loaning laws to prevent being sued for abusive lending policies. If they follow these rules in the first place, why would they worry about being sued for abusive lending?
ReplyDeleteI certainly hope that with these new regulations plus the lessons learned from the housing market crash that there will not be another collapse. I just hope a day eventually comes where we can rely on personal responsibility instead of complicated rules and regulations to prevent ourselves from making mistakes such as the ones that caused the housing market to crash in the first place such as lending to people who bankers know will not be able to pay off their debt and if you are a buyer, not applying for a loan when you know you aren't going to be able to pay it off.
ReplyDeleteThe introduction just make me wonder why we didn't have such laws in the first place. It is clear that we need the laws to protect people's investments however with the current economic situation just how many household are going to be in position to take loans? As of now these laws are just going to prevent any possible developments in the housing market.
ReplyDeleteEven though the banks and everyone involved made mistakes, like Keaton said about the ability to receive a loan without proper documentation, it is encouraging to see that measures are being taken to improve the housing situation in the U.S. Taking care of the housing situation will help the overall economy but more definitely needs to be done.
ReplyDeleteI agree with Mark. Adding to that, I think an important aspect of the housing crisis is learning from it. While our country wants to achieve certain goals and help certain groups of people, good intentions aren't substitutes for proper and good policy. For whatever reasons the banks let people get loans without proper documentation, cutting corners for business ended up hurting the whole country bad. This lesson should be learned or we will just have a repeat but in a different market or department.
ReplyDeleteThe fact that it took the Consumer Financial Protection Bureau this long to make these rules is outrageous. Many of the banks took heat during the recession because they were making risky loans to people who could not easily repay the money. The government should have stopped this when it was first a problem not waited until now. I think that next the Bureau should work on getting all home mortgages "qualified" so that people are protected and the banks have more incentive to make smart loans. I hope that we can find a way to both protect banks and people while making money easily available for loans.
ReplyDeleteThese new rules and regulations almost seem like "common sense" to implement. I don't even want to get into the housing crisis back in mid 2000's. Without proper documentation and financial assets, virtually anyone could get a loan. Thats absurd! In my opinion, these new rules should have been unwritten rules that all lenders followed all along. Lets be real here, how stupid could our lenders have been to even give out a loan to an individual who clearly can't afford it?
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ReplyDeleteI agree with Brandon. To add, I have a question. Should the government continue to push for home ownership for all? (i.e. tax breaks and other subsidies) I believe that investment in goods that depreciate in value is a tricky thing in our current economic climate. Especially with small down payments. Pushing people into becoming homeowners with tax incentives seems to be the government asking for trouble.
ReplyDeleteIs this real life? Why would we ever allow someone to receive a loan without proper documentation? That just seems ridiculous, but I'm hoping that with these new regulations we will be able to easily prevent another housing market crash.
ReplyDeleteI would have to agree with Clay about people needing to take personal responsibility because we can't just rely on the government to fix all our problems. If you don't have a plan to pay off a loan later in life, you shouldn't apply for one.
I could never believe that this could ever happen in real life. Why money could be used so wasteful? I hope the new regulations will help make the market safer and protect the investors. I agree with Gift that why we don't have the law in 1st place. If the law should be implemented earlier, the market would be more stable.
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