Leave it up to bankers, the main contributors to the mortgage crisis, to come up with the stupid and ignorant quote of the year (or possibly of the century). Reuters reports in “Bank of America-Countrywide to curb risky mortgages:”
Bank of America Corp said on Tuesday it plans to stop offering some riskier mortgage loans after it finishes buying Countrywide Financial Corp., the largest U.S. mortgage lender.
The second-largest U.S. bank said the combined businesses will not offer “option” adjustable-rate mortgages, which let borrowers pay less than the interest due.
It also plans to “significantly curtail” other non-traditional mortgages, including some loans that don’t require borrowers to fully document income or assets.
The Charlotte, North Carolina-based bank also said it will limit prepayment penalties and offer enhanced protections on interest-only and “hybrid” adjustable-rate mortgages. The latter carry fixed interest rates for a period of time, typically five years, and then adjust.
Bank of America will continue to offer loans eligible for purchase by mortgage financiers such as Fannie Mae and Freddie Mac, as well as adjustable-rate mortgages, and mortgages with a 10-year minimum interest-only period.
“We recognize this tightening, by definition, restricts the availability of credit to some borrowers,” said Bruce Hammonds, Bank of America’s global consumer credit executive. “However, this will help ensure that those who get loans can afford to repay them.”
Duh? As opposed to doing what? Extending credit to anybody who can fog up a mirror? Hello Mr. banker; a fact that you may have been missing is that some people are simply not credit worthy, should not have credit extended to and should not own a home. Has this realization now finally set in, where it should have been part of responsible loan underwriting all along?
Ok, so ignorant, selfish and greedy bankers are a pet peeve of mine. If you are one, tough! This blog is not about political correctness but saying it as it is. Ah, I feel better; I had to get this off my chest.