Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: Lee who wrote (68093)	8/27/2007 9:22:14 AM
From: Dan3	Read Replies (1) of 116555

Re: Lets say that the Fed cuts rates by 50-75 points by November. The problem is more from cascading penalties and fees and things like 5% over prime rate adjustements. We need usury laws on mortgages. Changing the discount rate has no meaningful affect on borrowers who aren't accountants with law degrees (and no one with less training can figure out the 100+ pages of these agreements). We need legislated caps on rates and those rates need to include the amortization of penalties and fees. Penalties on mortgages need to be included in the rate cap. If the borrower doesn't pay, then foreclose. The definition of a mortgage is that the lender has security for the loan and that's enough. Giving someone a "6%" mortgage and then charging fees equal to 5% of the amount loaned is not a 6% mortgage.

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