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Theology without repentance

Guest perspective: New guidance on nontraditional mortgage risks preaches gospel

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On Friday, Sept. 29, the interagency group representing the Federal Reserve, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, Office of Thrift Supervision and the National Credit Union Administration issued its "final guidance" on nontraditional mortgage products (henceforth "Guidance"). It is essentially a theological document. Guidance is designed to shield the agencies from the wrath of God (Congress) if the flood should come by demonstrating that the agencies did all in their power to stop the sinful behavior that brought it on. It is theological also in that most of it is given over to preaching the gospel. Here are a few representative samples out of many dozens: "Management should ensure that loan terms and underwriting standards are consistent with prudent lending practices, including consideration of a borrower's repayment capacity." (p.17) "Loan terms should be based on a disciplined analysis of potential exposures and compensating factors to ...