EQUIPO NIZKOR |
|
08Nov10
BNY Mellon CEO urges higher mortgage loan standards
Bank of New York Mellon Chief Executive Robert Kelly, deploring the crisis in the U.S. housing market, on Monday said regulators should demand higher underwriting standards and require bank lenders to retain half of the loans they make on their balance sheet.
Kelly, who is Canadian, said banks and housing markets in Canada and Australia held up much better in the 2007-2008 financial crisis than they did in the United States. The difference, he said, were lenders who wanted to know they would be repaid.
"It's absolutely terrible" what has happened to American homeowners," and it was totally avoidable," Kelly said in an interview with PBS's Charlie Rose at the Securities Industry and Financial Markets Association annual meeting.
Plunging home prices followed a decade of loosening lending standards and the advent of a securitization market, in which lenders quickly sold loans and so offset any risk of losses to other parties. Banks and other mortgage lenders stopped demanding proof of income or even collateral.
"We need good national standards for mortgage underwriting," Kelly said. "The banks should own 50 percent of the paper, with the other half sold through a privatized securitization process.
[Source: Reuters, New York, 08Nov10]
 | This document has been published on 09Nov10 by the Equipo Nizkor and Derechos Human Rights. In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. |