House Democrats have introduced legislation that would hold third-party banks liable for packaging and reselling mortgages that the borrower decides to sue on. Back in April, I wrote in the Wall Street Journal why this earmark for trial lawyers would be disastrous to the economy and make the subprime crisis far worse than it is now.
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It appears Congressman Frank is grand standing. His new proposed rules would create a credit crunch in housing worse that in the early 1970’s.
His proposals clearly illistrate that he does not understand the real world of real estate financing. Remember in the late 1970’s New Yorks 8% usury law? Remember what happen in Georga a few years ago when it first passed is predatory lending law (that was soon after modified)?
I believe it is his idea of how to get more political donations for his party.
His proposals/new rules will be a great fund raiser for the Democrats.
Keep track of the number of financial firms that will appear on his contribution disclosures.