According to a new article from CNN Money, it’s not the [tag-tec]Federal Reserve[/tag-tec]. It’s Wall Street.
Should we be surprised?
The article goes on to describe the three main impact changes according to Doug Duncan, chief Economist for the Mortgage Bankers Association.
Creative financing to the tune of nothing down is over for the time being.
2. Stated Income
Borrowers will have to come clean and actually reveal their real incomes.
3. Layered Risks
From now on only one suspect issue will be allowed on a [tag-ice]borrower’s[/tag-ice] record.
In other words, the borrower won’t be given a free pass if he has more than one eye-brow raising problem with his credit and record.
Another interesting point brought out by the article is that the Federal Reserve guidelines for [tag-self]subprime[/tag-self] loans are just that. Guidelines. They are not enforceable.
So it’s safe to assume the government is giving the industry the slack to straighten itself out.