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aj485 wrote, So how do you define 'substantial'? Seems to me that a failure rate of less than 1% and the industry self-correcting

To which you replied, try to stay on topic - the rates are around 15% for the stated income mortgages. That's pretty damn high.

And you'd be d*mn wrong.

No one said anywhere that 15% of stated income mortgages are either in default or in foreclosure. You just made that up.

You started this thread with a link to an article about the "blowout" in sub-prime mortgages. aj485 was quoting you statistics about default and foreclosure rates for sub-prime mortgages and the entire industry as a whole. How could that be any more on-topic?

Personally, I think aj485's assessment is dead-on. The sub-prime market is a small fraction of the entire industry. It was a mistake for lenders to loosen their underwriting requirements for sub-prime borrowers - after all, they're sub-prime for a reason.

The lending industry's mistakes appear to be self-correcting. People that shouldn't have been loaned money for a house (that's less than 1% of borrowers, if you're bothering to keep score here) are loosing their houses and the most egregious lenders are taking a bath because of their stupidity. So what's the point of tacking on the expense of legislation when it's really too late to do anything that would make a real difference for the ones that are loosing their houses right now?

- Joel
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