Biz Levity - We Give Business the Business

Federal Reserve Gives Home Buyers More Protection Against Shady Lending Practices

by sscatz on July 14th, 2008

Fed Adopts Plan to Wrap Borrowers in Giant-size Condoms

The Federal Reserve approved a plan that would crack down on dubious lending practices that have hurt many of the riskiest “subprime” borrowers.

The plan would bar lenders from making loans to panhandlers, bums and hobos. In addition, the proposal would require lenders to make sure risky borrowers set aside money to pay for taxes and insurance, and send bank personnel out to do borrowers’ laundry.

According to Susan Wachter of the University of Pennsylvania’s Wharton School of Business, “Clearly this is closing the barn door after the fact.” Professor Wachter goes on to say, “Of course, if there’s a homeless guy sleeping in the barn who has no visible means of support, he’ll probably try to get a mortgage on the barn and some dumb banker will probably give it to him.”

-

New owner of 5,000 sf Tribeca loft

-

Share This

Related Stories

• Bernanke Says More Must Be Done To Prevent Foreclosures
• Blu-Ray Wins Over HD-DVD
• Bernanke Doesn’t See Return Of ’70s Woes
• The American Express Bailout Card — Don’t Leave Home Without It
• Bear Stearns Gets Emergency Bailout From JP Morgan and Fed

POSTED IN: Uncategorized