Letters to the Editor
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Flexible Guidelines
If the "regulated bankers" had been more flexible with their underwriting guidelines then not as many people would have been at the mercy of predatory lenders,
The banks were more flexible - that's why we're in the mess we're in today. They were directly financing loans they shouldn't have been, and they were gobbling up massive packages of mortgage debt generated and then sold off by fly-by-night predatory lenders. If major financial institutions hadn't spent the past 5 years buying that garbage like it was going out of style, the worst of the mortgage scam could never have been pulled off.
There's a reason why the guidelines were strict prior to the deregulated fraud-for-all of the past 20 years or so - it's because strict guidelines work. That's why they were legislated into existence to begin with. They protect not only homebuyers, but also lenders and investors from the kind of implosion we're seeing today. The latest casualty appears to be Northern Rock bank in the UK, which had to crawl to the Bank of England for financing as they could no longer fund their day-to-day operations.
The old folks know where this is heading - they've queued up around the block to withdraw their funds. They've seen this all before, in 1929.