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01 Dec 08 Can Obama Repair the Home Mortgage Lending Industry?

Here is the problem Mr. President Elect, the subprime meltdown and the foreclosure crisis problem is far more complicated than predatory lending from unscrupulous mortgage brokers. Banks do not like mortgage brokers and for years they fueled the fire that mortgage brokers caused the sub-prime meltdown. For the last decade, Banks have developed mortgage lending guidelines that created a housing boom. American homeowners prospered and what could go wrong. Lending guidelines in 2005 and 2006 went too far in allowing no money down home loans for borrowers with little, no or bad credit. The housing bubble bursted and jobs were lost. The home loan financing industry melted and banks tightened their guidelines to the point where average homeowners could not qualify to refinance into a fixed rate mortgage they could afford. FHA home mortgage loans have started to require certain credit scores and lenders like to play appraiser and reduce their appraised value to the point where everyone has been wasting their time. Home equity tanked and the foreclosure concerns became an epidemic.

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