Credits Crawl

As a retired banker, it concerns me that the Feds finds it necessary to regulate sound business practices, common sense and integrity within the financial sector. Highlights of the amendment include prohibiting a lender from making a loan without regard to borrowers’ ability to repay the loan from income and assets other than the home’s value. A lender complies, in part, by assessing repayment ability based on the highest scheduled payment in the first seven years of the loan. Other highlights: requiring creditors to verify the income and assets they rely upon to determine repayment ability; requiring creditors to establish escrow accounts for property taxes and homeowner’s insurance for all first-lien mortgage loans; and creditors and mortgage brokers are prohibited from coercing a real estate appraiser to misstate a home’s value.

This amendment mandating that lenders follow sound ethical business practices, however, doesn’t go into effect until Oct. 1, 2009. Go figure.

Clearly, greed caused too many corporate executives to institute policies that weren’t based on sound business practices, common sense or ethics. That greed may have engineered the biggest wealth heist in U.S. history and rocked global markets for years to come. Where was the corporate governance and due diligence? Where was the risk management? Where were the credit rating agencies? Where were the bond insurers? If there were many willing partners in this the mother of all greed fests, where is the state attorneys general and where is the U.S. attorney general? Justice is long overdue.

—Marlin Kisselstein

North Syracuse