Lackadaisical Lending Standards

Low interest rates, creative mortgage products like I/Os, and lackadaisical lending standards are fueling people’s ability to pay for new homes. There is no shortage of housing. Wealthy baby boomers are not soaking up supply. The only reason house prices keep going up is because money is cheap and easy to obtain.

[“He didn't have the income to qualify for the first loan, let alone the subsequent mortgages. He has no reserves, suspect credit and a stay-at-home wife. It is illegal for me to deny him a loan. It is illegal for me to ask him to verify his income if he is applying for a no income verification loan. But his loan was approved, which made me sick to my stomach. Today I had a conversation with him. I told him that if he wanted the loan, I could not stop him from taking it and that I would give it to him. I also told him that I believed he was lying about his income. I violated the law when I did this.]