Well this was unexpected.
From Reuters:
U.S. Sen. Christopher Dodd, chairman of the Senate Banking Committee, is blaming federal regulators for the crisis in the subprime mortgage market.
Dodd, a presidential hopeful, said in a statement that “a pattern of neglect by federal bank regulators … precipitated the subprime mortgage crisis that could cause 2.2 million home owners to lose their homes.”
Dodd described rising interest rates combined with the Federal Reserve’s tolerance for lax lending standards as “a perfect storm that has contributed to the hardship and heartache that millions of home owners now face.”
I guess.
Add the Federal Reserve, Fannie Mae, and Freddie Mac to the list of culprits, along with lenders … and borrowers.
Senator Dodd had a lot more to say, including a suggestion that the government should consider providing aid to about 2.2 million subprime mortgage borrowers who are at risk of defaulting and losing their homes.
Others aren’t so sure.
From Bloomberg.com:
Federal aid “would come at a cost,” said Douglas Duncan, chief economist at the Mortgage Bankers Association. “It has to be paid for and the question is would the 34 percent of homeowners who have no mortgage be willing to pay taxes to support the bailout of people who traditionally have not managed credit well?”
My answer: No.
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