Will We Ever See the Days of 'Loosing Lending' Again?

[Corey Dutton]

They say the memory of the market is the shortest memory of all. Will banks ever go back to their ‘loose lending’ ways of the years 2005 to 2008? With more stringent banking standards imposed by the international regulatory body, the Basel III, many industry insiders say, “No way!” With higher standards of liquidity and leverage that U.S. banks will have to adhere to by 2015, most banks are tightening up the purse strings, not loosening them.

But it’s not the stated income loans that were the villains in this real estate meltdown drama, but rather the banks themselves and Wall Street. Placing the blame on the stated income loan products is like saying a vicious dog is at fault for biting someone, when really it’s the abusive owner of the dog who is at fault. Personally I think eventually banks will go back to their loose lending practices of 2005 to 2008, but there will be a new loan product, like the stated income loan product, that banks and Wall Street will be pushing. Again, the memory of the market is the shortest memory of all. What is your opinion on this topic? Will banks ever go back to their loose lending practices of 2005 to 2008. Please comment below.

Posted by Corey Curwick Dutton