Lending Standards Plumb New Depths
“Their primary lending unit, World Savings, is now offering on owner-occupied homes 90% loan-to-value, no-income-verification, cash-out refinances into negatively amortizing, adjustable-rate mortgage loans. There is no liquid-reserve minimum, nor is there a stated-minimum credit score. This type of loan was not available even through the sub-prime private lending market just five years ago. Today it is being made available by the company that has built a reputation for soundness, ethics and character that makes Warren Buffet[t] pale in comparison. Do ya think Herb and Marion know what is happening in their company? If the icons of business ethics are doing this what do you suppose the rest of the industry, comprised of mere mortals, is doing?
Scary stuff, indeed….