How Bush Neglect Hurt The Reverse Mortgage Industry

The Bush administration has been blamed for a lot of things that have gone wrong in America and rightly so. The financial crises that now rocks the country stems from the collapse of the mortgage industry and the buck of the problem once again rest with President Bush. While he concentrated on sending young Americans to the war front in Iraq he ignored clear cut signs back home that the mortgage industry was facing impeding doom.

The reverse mortgage industry in the U.S. as well as many other industries is in dire straits. The Bush administration was warned time and again to crackdown on no-money-down interest only mortgages. They were warned to implement stricter mortgage lending policies long before the reverse mortgage industry collapsed. Many of the banks, in order to remain competitive and attract more clients were slacking their lending rules. The banks pressured the Bush administration to do nothing about it giving assurances that everything was under control.

By the time most of the mortgage loans began to go bad, it was too late to do much. According to an Associated Press review of regulatory documents there were clear warning signs that there was going to be a financial meltdown but the Bush administration turned a blind eye. They believed the assurances from banks, many of which have now failed and collapsed.

A mortgage lender in California, Paris Welch was reported to have written to U.S. mortgage regulators far back in January of 2006. She told them, “Expect foreclosures, expect fallout, and expect horror stories. Obviously the authorities did nothing and one year later the mortgage collapse made her lose her job.

No with many of the mortgages gone bad and many of the mortgage homes foreclosed the banks and mortgage lenders have lost their financial muscle to give out loans. The value of properties has greatly depreciated with many of them appearing for sale in the market. The Bush administration really has a lot to be blamed for the downslide of the reverse mortgage industry.