Could tight mortgage practices be worse than loose lending?

Chairman of Uniondale, Lewis Raineri, doles out warning at Mortgage Bankers Association in Washington


Jody Shenn
October 28, 2013 9:24PM (UTC)

Oct. 28 (Bloomberg) -- The U.S. mortgage market has experienced an “irrational restriction” of credit as lenders and regulators overreact to the loose lending during a bubble that burst in 2007, mortgage-bond pioneer Lewis Ranieri said.

“If this legacy persists the consequences will be more profound for the country than the economic losses” caused by the bust, Ranieri said today at an annual conference hosted by the Mortgage Bankers Association in Washington.

Advertisement:

Ranieri, the chairman of Uniondale, New York-based Ranieri Partners, helped expand the mortgage-securities market in the 1980s at Salomon Brothers Inc., where he was vice chairman. His firm’s investments include Selene Finance LP, which targets soured debt, and home lender Shellpoint Partners LLC.

Tight credit and foreclosures pushed down the U.S. homeownership rate to 65 percent in the first half of this year from a peak of 69.2 percent in June 2004, according to Census Bureau data.

Most lenders no longer offer borrowers the ability to qualify without fully documenting their incomes and assets, and starting next year regulations known as qualified mortgage rules will expose originators to greater legal risks when making loans with payments exceeding 43 percent of their pay or carrying risky features.

 

--Editors: Alan Goldstein, Richard Bravo

To contact the reporter on this story: Jody Shenn in New York at jshenn@bloomberg.net.

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net.


Jody Shenn

MORE FROM Jody Shenn

Related Topics ------------------------------------------

Bloomberg Borrowing Economy Housing Bubble Lending Mortgage

BROWSE SALON.COM
COMPLETELY AD FREE,
FOR THE NEXT HOUR

Read Now, Pay Later - no upfront
registration for 1-Hour Access

Click Here
7-Day Access and Monthly
Subscriptions also available
No tracking or personal data collection
beyond name and email address

•••


Fearless journalism
in your inbox every day

Sign up for our free newsletter

• • •