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01/23/2011

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Jack

"After the financial crisis began, similar claims about exploitation of ignorant consumers were levied against providers of credit cards and mortgages. These claims motivated the consumer “protection” and other parts of The Dodd-Frank Wall Street Reform and Consumer Protection Act passed in July 2010. Yet little evidence suggests that borrowers were widely fooled by small print on borrowing contracts, by how interest rates were calculated, or by other claims about consumer exploitation (see my post on July 11, 2010). The consumer protection provisions of this Act will do little good, and will raise borrowing costs to the consumers who can least afford it."

............ Sounds as if Prof Becker missed the testimony from a parade of witnesses of credit card abuse that generated the D-F bill and ginned up the votes to pass it. Interest upon interest upon fees atop interest. Is he aware of the vigorish exacted? When a credit card holder does get in trouble is there wisdom in piling on and pushing the guy into default? If they "need" to charge 18 - 30% to those of marginal ability to repay are they doing anyone a favor?

Has Becker seen the far more borrower friendly c-card contracts of the EU which is generally standardized, simple and readable. Do "WE" never tire of the antics of the money changers in the temple? and the "growth" and excess of our?? financial sector?

home buyer

Last year was kinda a bizarre year for the mortgage market. In the first half of the year, you had a decent number of home sales keeping mortgages for purchases stable, thanks to the home buyer credit. In the second half of the year, that changed as demand crumbled when the credit was withdrawn. At the same time, you had very low mortgage interest rates throughout much of the year cause a mini-refinancing boom. 2011 will look very different, as the housing demand continues to struggle and mortgage interest rates have begun rising.


Jack

Homebuyer: Yeah, "a sticky wicket" as some Brits used to say. With so much capital wiped out the rational change of putting 10% down dampens demand considerably. Builders can NOT get money to build spec homes, so the new home buyer has to have good credit and the patience to wait most of a year while the home is constructed. Foreclosures and "short sales" may take a month to a year to close and those buyers have to look pretty good.

From the (newly chastened??) banker's perspective, it's dicey lending 90% against an asset that may well be declining. Ha! bet there are a lot of conversations that begin with "Well lending might b less bad than not lending" and end with "Well mebbe not".

MIC

Some enthusiasts for microfinance have sold it as an important component of the solution to poverty in developing countries.

John D

Given that 90% of Bangladesh is Muslim, it didn't take much for Grameen Bank to lend to Muslim women. You could have just said 'women': it's not like the local moneylenders in Bangladesh had this huge pool of non-Muslim women that they had been lending money to earlier.

Additionally, I believe 'Muslim' is preferable to the word 'Moslem' nowadays.

David Brown

Its a shame to see all these people going in to forclosure who were mislead, over promised and underdelivered.

http://www.brown-lending.com/foreclosure/avoid/avoiding_foreclosure.htm

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