Dollars and Jens
Tuesday, January 15, 2008
mortgage fraud
I've been wondering what the full implications would be of a short-term amnesty, waiving criminal penalties against borrowers who lied on their mortgage applications if they 'fess up quickly. It seems likely that it would have little beneficial effect unless one or more lenders also waived civil liability — if a "right to sue" can't generally be waived, perhaps allowing it here would be part of the same legislation. The issues in the credit markets in particular are in large part a function of pervasive ignorance of its scale; perhaps at least bringing some of this into the light would have a palliative effect there.
Oh, and if I haven't predicted it before: in about five years, the political pendulum will have swung or will be swinging back in the other direction, criticizing lenders for not making enough loans to bad credits.
