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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Clarksterh who wrote (70908)10/4/2006 5:11:39 PM
From: ridingycurve  Read Replies (1) of 110194
 
Don't take this to the bank but I've heard a lot of these loans were originated by mortgage companies that tweaked the numbers to make the loans work. The loans were then presented for sale to banks that were so busy they did not perform proper underwriting. If this is true I still expect the guidelines to have a significant impact, as banks will likely now be more diligent underwriting purchased loans.

The problem was reportedly not universal, but was specific to certain markets such as Kali.

There are institutions that have been successfully underwriting option ARMs and similar products for years for their most valued and credit worthy customers. They will be unaffected.
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