The Positive Fallout of the SubPrime Mortgage Crisis
The mortgage industry has been much maligned lately - partly deserved due to predatory and fraudulent loan practices committed by some. At the same time, the mortgage industry is a cornerstone of democracy, as without it, only wealthy people would be able to purchase property and build personal wealth from little to nothing.
The Federal Reserve has been criticized for not properly regulating in time to prevent such a widespread crisis as we find ourselves in today -- the result of unscrupulous lending practices. Therefore, Ben Bernanke and others initiated a proposal for some hefty regulations of the credit card industry. The credit card industry, like the SubPrime Mortgage industry, often preys upon the poor -- the one difference being, of course, that during "regular" economic times, mortgages help people increase their net worth and credit cards help them DECREASE it.
So while I wouldn't morally equate the two, if the mortgage crisis leads to increased responsibility on the part of credit card lenders, then that's one good thing about all of this.
Some of the things being considered are requiring a grace period before the payment is considered late, prohibiting the application of payments to the lowest-interest balance first and raising interest rates on existing balances.
2 comments:
I always wanted to write in my site something like that but I guess you'r faster.
I like this post. This article really made me think deeply, that’s a rarity for me.
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