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<blockquote data-quote="Rmsanger" data-source="post: 3603696" data-attributes="member: 544424">this really is just a temporary bandaid to keep those who can afford it to stay in their houses.&nbsp; It does nothing to address the long-term integrity of the lending system and how risk is measured.&nbsp; Anytime a firm&#039;s risk department is not independent of a sales department you will have moral hazards.This is a very similar situation to the stock market crash a few years ago where everyone adopted a heard-like mentaility and adopted new investment profiles based upon their misperception of risk.&nbsp; Here all mortgage lenders ditched the 250% rule and lent out 800-1000% of a family&#039;s avg gross income.&nbsp; Leverage plus rising prices is great but too much leverage and lower pricing or flat pricing can lead toward recessions.&nbsp;&nbsp; We are just using an effective measury to weed out these people without causing a recession or violating the constitution.</blockquote>

[QUOTE="Rmsanger, post: 3603696, member: 544424"] this really is just a temporary bandaid to keep those who can afford it to stay in their houses. It does nothing to address the long-term integrity of the lending system and how risk is measured. Anytime a firm's risk department is not independent of a sales department you will have moral hazards. This is a very similar situation to the stock market crash a few years ago where everyone adopted a heard-like mentaility and adopted new investment profiles based upon their misperception of risk. Here all mortgage lenders ditched the 250% rule and lent out 800-1000% of a family's avg gross income. Leverage plus rising prices is great but too much leverage and lower pricing or flat pricing can lead toward recessions. We are just using an effective measury to weed out these people without causing a recession or violating the constitution. [/QUOTE]

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