Web Winners / Subprime lending

Posted: March 18, 2007

As the growing subprime-mortgage debacle continued to rock stock exchanges and further undermine the weak housing market, we went to the Web for evidence that anyone saw this coming. Some did, but many didn't.

Happier days. "The net social evaluation of these trends is probably a strong positive," Edward M. Gramlich, a former governor on the Federal Reserve Board, said in this 2004 speech about the growth of subprime-mortgage lending. It's one more piece of evidence that the road to hell is paved with good intentions.

Mortgage professor. Jack Guttentag, an emeritus professor of finance at the Wharton School of the University of Pennsylvania, is the Mortgage Professor. On his Web site, he discusses both the subprime lender and subprime borrower - and the caution that both need to exercise. Presumably he went largely unheeded in recent years. However, the site is a treasure of levelheaded advice for current and prospective borrowers. His spreadsheets are simple to use and invaluable for detailed calculations of the payments you'd make on an interest-only mortgage, or whatever sort of loan you are considering.

Wharton knowledge. This recent article from Wharton quotes Guttentag as saying he's an "optimistic pessimist" about the current situation.


Mortgage basics. Bankrate.com offers some schooling in mortgage basics, and one of the articles posted last year describes subprimes. It describes some of the tactics that led to the current crisis.

AARP research. Articles from this search that we did on the AARP Web site seems to demonstrate a growing concern over recent years about the impact of subprime loans on older people, who are often the targets of unscrupulous lenders.

Blogging stocks. This busy blog about the markets is likely among the first places to showcase the latest development in the subprime crisis - or any other matter moving Wall Street.

Consumer protection. Consumers, who may buy a house once in a lifetime, often feel lost in the process. This Web site provides important information about laws protecting the rights of home buyers, including the Fair Debt Collection Practices Act.

Contact staff writer Reid Kanaley at 215-854-5114 or rkanaley@phillynews.com.


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