Tucker misses point of mortgage crisis

Once again, Cynthia Tucker misses the true causes of the mortgage crisis. Her typical, tired partisanship and not looking for facts helped her prove how wrong she is in belief that the only reason for the current mess is greed.

There is a huge difference in qualified borrowers and unqualified borrowers. As I watched the government change lending rules in the late '90s, all of a sudden the banks were required to lend money in their immediate areas at a much higher percentage rate. The ending result was loosened lending guidelines and increased broker compensation for providing these loans to banks to improve their percentages to the government. This brought many customers to real estate offices who had never been there before. From the lending side, who wouldn't try to bring a loan where you could make more money (yes, for the same fixed rate loan, not an adjustable)?

The banks approved the loans, not the brokers. It was to appease the government who created the rules.

Later, when the payments weren't made on time, this had a huge impact toward the subprime market as many people no longer could qualify under the same guidelines. FHA loans, a staple from the past, were no longer an option. The only outlet was a risky subprime loan. Once that dried up, guess what happened?

How do I know? I've been in lending since 1985.

Tucker also misses the fact that greed misled the consumer into buying larger homes than they could afford. A desire to buy the largest house they could qualify for created no room for error. I think we've seen the downside to that.

If she meant to say it's not the fault of the former heads of FNMA, all Democrats, who changed their own accounting methods to create bonuses, she's way wrong there, too.

Lawrence Teich

Naperville