My suggestion for new legislation:

1. Don’t let any bank become so large that it would be impossible for the FDIC to insure deposits.

2. Don’t let any bank intentionally hold valueless assets on their books to make them look solvent.

3. Don’t let any bank extend a mortgage greater than 80% LTV without PMI from an insurance company who actually has enough money to pay off the insurance if the loan goes bad. (see below for govt secured mortgages)

4. Don’t let any bank or mortgage lender convert mortgages into securities and sell them as if there is no risk to the securities holder.

5. When the government secures loans up to (or beyond) 99% LTV , then when the loan crashes, the bank gets to hand the loan DIRECTLY to the government (not some half-crippled assignee) and say “here it’s your problem”. After all, they were the ones who guaranteed it in the first place.

6. Home appraisals should come with a GUARANTEE that the appraisal is accurate OR be fully liable for the bad loan should the appraisal be proven to be fraudulent.

7. Mortgage brokers should be required to refund 100% of their commission on any mortgage that goes bad in the first 3 years.

8. Any Real Estate agent who KNOWINGLY participates in a fraudulently financed transaction should be considered as an accomplice to the fraud, which is a criminal activity.

Add it up, no more mortgage crisis.

Ameri

Related Posts:

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• A Post from Jim Sinclairs site:
• Fed should start to charge the bank reserves to push serious lending.
• Lender beware. Don’t lend money that you don’t expect to get back.
• Are Banks Scamming Fannie?

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