Friday, July 15, 2005

Easy Al Keeps His "Hands-Off" The Punchbowl

The New York Times reports today how while the Federal Reserve Board has started some angst-ridden handwringing about so-called "froth" in the housing market, it has no real will to take action to curb the absurd lending practices that continue to throw fuel on the fire:

"First they issued new 'guidance' to banks about home-equity loans, warning against letting homeowners borrow too much against their houses. Then they expressed worry about the surge in no-money-down mortgages, interest-only loans and 'liar's loans' that require no proof of a borrower's income. The impact so far? Almost nil. "

Why you may ask? "The reason is that federal banking regulators, from the Federal Reserve to the Office of the Comptroller of the Currency, have been reluctant to back up their words with specific actions. For even as they urge caution, officials here are loath to stand in the way of new methods of extending credit."

NYTimes article below:


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