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New Mortgage Lending Rules Unveiled; Do You Think They'll Do Any Good?

By Joseph McDaniel, Esq.

There's a nice article in the Wall Street Journal about new proposed mortgage lending rules.

Do you think they'll do any good?

I don't.

I'm old enough (my hair is finally the right color, you know?) that I've now seen it all, twice.

Once I saw land prices in Arizona drop into the basement when the tax laws in the United States were changed without a grandfather clause; a few decades ago.

One of the stupidest things Washington ever did, and the effects were interesting.

Aside from sending a lot of business to Arizona Bankruptcy Attorneys, one side-effect was that bankers all became incompetent and dishonest overnight, because Congress couldn't accept the fact the it had caused that real-estate disaster by fiddling with the tax laws in monumentally stupid ways.

And a roving gang of prosecutors scoured the country for bankers who were in failed banks, which failed because of the tax changes, so they could prosecute 'em and thereby get some poster children for the premise that it wasn't the fault of the tax law changes. 

That last bit, the business with the random criminal prosecutions of bankers (who were among the most conservative and honest citizens you could ever meet) meant that for years and years and years, lending in the United States was very, very careful.

And then somebody who was new on the job got a promotion for loosey-goosey lending, and a new cycle began.

When somebody builds an economic system without risk, it will also be an economic system without reward.

It will look a lot like Moscow used to look.

And I kinda like the idea that here in the United States we have choices when we go to the store.

 

Full post as published by Arizona Bankruptcy Attorney Blog on March 29, 2011 (boomark / email).