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One attribute of safer loans, the regulators found, was that homeowners had made a down payment of at least 20 percent.
Credit Suisse likely has safer loans than peers; for instance it holds a lot of Swiss mortgages, which have shown much lower losses than, say, JPMorgan's home loans.
My thesis is that the big banks like to use the $20 million measurement so they can stick bigger, safer loans into their numbers and still look like they're helping small business.
This threat of paying through the nose when selling Fannie and Freddie mortgages outside prescribed standards has cleaned up the market significantly over the past few years, resulting in safer loans and fewer delinquencies.
The White House pursued a narrower plan offered by Mr. Montgomery that would have allowed the F.H.A. to loosen standards so it could lure back subprime borrowers by insuring similar, but safer, loans.
And to the extent that macroprudential measures slow down the growth of assets, debt and wealth, they delay the need to raise interest rates, so safer loans remain cheaper for longer.Third, the danger of raising interest rates to dampen down asset prices is much bigger now than it was ten years ago, because rates are near zero.
Similar(50)
"A jumbo loan is one of the safest loans if standard underwriting guidelines are adhered to".
Lenders focus on only the safest loans to the best risks.
The only real protection against such a downfall was purchasing only the safest loans.
The borrowers might have thought these were safe loans, but it turns out they bet the house".
The rule, which would require the safest loans to have a 20 percentt down payment, would exclude many first-time homebuyers, many of whom are Latino.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com