Submitted by Ronald Tennant with Metrocities Mortgage:
American Banker (05/23/08) P. 3; Hopkins, Cheyenne
Comptroller of the Currency John Dugan took aim at home equity lending during a May 22 speech sponsored by the Financial Services Roundtable's housing policy council. Dugan said that the practice of using such loans to finance down payments should be ended, that the use of tools to value collateral and verify income should be improved, that interest-only loans should be avoided and that banks' reserves against home equity loans should be increased. "In particular, we need to revisit the problems that landed lenders where we are today--particularly some of the 'shortcuts' established in reaction to aggressive competition," he remarked. Home equity volume more than doubled since 2002 to $1.1 trillion, but loose underwriting and declining property values have now led to losses, including $2.7 billion in the first quarter, which represents a ninefold increase from a year ago.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment