Now We’re Talking…

I think Mr. Robbins is right on in this article.  The last sentence in the article speaks to the primary piece that would solve all of these problems, better educated consumers.  Every time I read a press account about a homeowner who lost their house in an “exotic” mortgage, the homeowner always says that they didn’t know what they were signing.  That’s astonishing when you think about it.  A better educated consumer will produce better results.  Now whether our Congress can produce education to teach fiscal responsibility is a whole other matter.

Mortgage official defends subprime loans They should be preserved as tools to buy homes, MBA chief says
By Robert Schroeder, MarketWatch
Last Update: 12:30 PM ET May 22, 2007  

WASHINGTON (MarketWatch) — The chief of the Mortgage Bankers Association defended the use of subprime loans Tuesday, saying they’ve enabled millions of Americans to buy homes and urging that a fix for that sector of the market not end up hobbling the entire mortgage industry.

At the same time, MBA Chairman John Robbins acknowledged that “unethical actors” in the mortgage industry have hurt borrowers and damaged bankers’ reputations. Subprime delinquencies have jumped in the U.S. as interest rates have climbed and house prices stopped rising. Subprime loans are usually extended to those borrowers with blemished credit records. But Robbins, in a speech at the National Press Club, said subprime loans remain “an extremely important tool for providing homeownership opportunities in this country.” “We must find a way to prevent future abuse without eliminating subprime loans,” Robbins said in a prepared text. (more…)