Author: Michael Peterson
Article:
Banking regulators were put on the "hot seat" in the Senate on
Thursday, over the bad credit home loan industry meltdown. The
Senate Committee gave the Fed a "verbal spanking" for not
providing adequate oversight of the bad credit mortgage industry.
Roger T. Cole, a senior Federal Reserve staffer got the worst
lashing from the Senate Committee on Banking, Housing and Urban
Affairs. The Senate Committee wanted to know, from this staffer,
why the Fed did not do more to monitor bad credit mortgage
companies. Over the last several years, underwriting standards
have become lax for exotic loan products like ARM's and pay
option adjustable rate mortgages that result in negative
amortization.
Senator Robert Menedez, New Jersey Democrat blasted the Fed for
being "asleep at the switch" and not forcing bad credit home
loan companies to use better practices.
Cole did agree that the Fed was partially responsible for the
subprime mortgage company problems, but pointed out that over
the last five years the Fed has taken three formal and three
informal actions against bad credit mortgage companies. He
further expressed the Feds views on regulating through education
and outreach programs to bring bad credit home loan companies
into compliance.
With one million bad credit mortgages adjusting this year for
consumers and 800,000 more in 2008, it is uncertain how this
will affect bad credit car loan lenders. The reason this is of
concern to bad credit auto loan companies is increased Fed
regulation of the subprime industry.
The bad credit car loan industry has the same types of exotic
loans as the bad credit mortgage industry. Increased Fed
regulation of the subprime mortgage industry, will more than
likely be experienced by the subprime car loan industry.
Surveys have projected that up to 2.2 million bad credit home
loan borrowers are at risk of defaulting on their loans and
losing their homes.
As foreclosures and home inventories rise, credit will tighten
in all lending sectors. The first to feel the "crunch" with be
subprime borrowers. So if you need
bad credit auto loan financing now would be the time to apply. If you are looking
to refinance a high interest rate mortgage with bad
credit.
About the author:
Michael Peterson works as a freelance writer for two websites:
BadCreditBMWLoans.com, a website that
specializes in helping people get
bad credit auto loans. EmbarkFinancialllc.com
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