HOW DO YOU PREVENT THIS IN THE FUTURE

Analysts say that credit will remain tight and more expensive until market participants sort out the sub-prime loan disaster. The federal government has a role to play and must take steps to prevent this from occurring in the future.Now mortgage brokers may not like this but what needs to be done is that certain kinds of loans such as Alt-A, Adjustable rate and stated income must be outlawed. Full documentation that is verifiable.

So that this will not prevent people from getting into a home a second step that could be taken as to down payments. Rather than require a down payment the new trend should be to base whether or not to loan on income, length of job, type of job.Many people who can pay for their mortgage simply do not have a huge down payment. Secondly keeping the savings in the bank account of these people makes more sense in that they can avoid a foreclosure due to loss of income by utilizing their savings.

Finally a tax should be levied on banks and other lending institutions with the proceeds going into a national fund to prevent foreclosure.No bail out should be provided o the banks or brokers because they were allowed and knew what they were doing and must pay. Tax increases are never a good thing if it can be helped, however this mess is going to result in a surge in homelessness, crime and other issues that develop when families loose their home.A tax now will save us billions down the road and the bankers and brokers just need to keep quiet and bee thankful that no one is suggesting (yet) that they serve hard time for the fraud that led to the sub-prime mess.