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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: reaper who wrote (163523)5/3/2002 7:53:22 AM
From: Oblomov  Read Replies (2) of 436258
 
> I frankly have no qualms about legislating that you can't charge over X percent for a loan.
> You can NEVER get out from under that burden.

Then these loans will never get made. Or, if the government forces a bank to lend (effectively nationalizing the banking system), then good credit borrowers would be forced to pay a much higher rate of interest to effectively fund bad credit and low income borrowers. Is that the type of financial system that you consider ideal?

These type of lenders have ALWAYS existed - but previously only as pawn shops or loan sharks. What is new is the securitization of subprime debt. This has allowed the subprime lenders to at least hedge their risk until now. But, we will see how effective the hedge is when it is tested...
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