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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: CalculatedRisk who wrote (70643)	9/29/2006 12:19:15 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 110194

my immediately reaction: 1. if the guidelines are followed, which I don't know how they can not follow, a ton of loans in the pipeline are going to be rejected. Furthermore, the recasters are going to have hell of a time refinancing, while the existing loans are all going to be non-conforming to these guidelines. 2. the big question is applicability to the non regulated lenders such as NEW, LEND and NFI. Could they actually benefit because all the regulated lenders such as CFC, WM, WFC would all be forced out of the market. I find it hard to believe that the powerful banking lobbyist would allow that to happen so it would be only short term. 3. I think it has teeth because while they are just guidelines, the banks are going to have to explain to the examiners why they choose to ignore the guidelines if they continue to lend using old underwriting standards. They guidelines are pretty clear.

To: CalculatedRisk who wrote (70643)	9/29/2006 1:11:36 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 110194

Looks like they are talking about brokered loans here: Central to prudent lending is the internal discipline to maintain sound loan terms and underwriting standards despite competitive pressures. Institutions are strongly cautioned against ceding underwriting standards to third parties that have different business objectives, risk tolerances, and core competencies. Loan terms should be based on a disciplined analysis of potential exposures and compensating factors to ensure risk levels remain manageable.