My 1st Million At 33 – yes, you can do it too

For anyone who will face a mortgage ARM reset going forward, but doesn’t have the income to pay for the monthly payment, the Ponzi game is over.

From the latest New York Times news:

The banks obviously don’t like this, because they understand that they have simply played with fire. Now they are getting caught, but still would like to continue to pass these hot potatoes (risks) to unsuspecting income investors. Without being able to extend the loans to these falling subprime borrowers, the current investors and banks will be stuck with the hot potatoes.

But don’t you wonder why banking regulators still want to increase the regulation, possibly knowing what may happen? Well, for the people in politics, they only care that when all the foreclosures are under the sun, they can at least claim that “oh yes, I did do something for this problem (by making it worse?).”

In any case, we will see more of ball kicking between government officials/politicians such as between Greenspan and Ed Gramlich.

But now Edward Gramlich, a former colleague of Greenspan, has reportedly gone on record to say the former Fed chairman blocked a proposal to increase scrutiny of subprime lenders under the Fed’s broad authority. What’s more, he asserted, that additional scrutiny might have helped curtail questionable lending practices that are now blamed for soaring defaults by mostly low-income borrowers many of whom fell prey to predatory lenders’ unscrupulous lending practices and high interest rates.

I am not sure Greenspan’s denial is in any way effective. He has got his fingerprints all over the housing bubble. How can you even deny it?