by Anthony B. Sanders
Anthony B. Sanders’ Blog
I spoke at one of Washington DC’s larger economic think tanks several years ago where people were cheering the creation of the Consumer Financial Protection Bureau (CFPB) and the end of subprime lending. My remark was: “As soon as we forget the credit crisis and a new generation of Wall Street investment bankers takes hold, we will see subprime lending again. There are thousands who will want credit and are shut out. The subprime lenders will rise again.” My remarks were not well received by those who believe that the Federal government should control all aspects of financial markets.
Fast forward to today. The private markets have found a way to provide credit for home purchases for borrowers with poor credit. How do these lenders bypass the vaunted Qualified Mortgage (QM) rules decreed by the CFPB? Simple.