A risk worth taking
Can we stop the rot if freddie mac or fannie may or bear stearn does not exist at all? The answer is a big YES. Why for that matter these big monsters, if not all including Lehman Brothers for that matter, went to the extent of borrowing $33 for every miserable asset they have, provide big paychecks for their CEOs,brokers and bogus agents alike. The answer is greed and further greed. So we do we go from here now that all the bad guys had just been blown by the tornados of the sub prime scandal.Bad loans, what bad loans? Clearinghouse CDFI, based in Lake Forest California (a non-profit organisation) made $230 million in Californias' sub prime mortgages with seven foreclosures and a decent $1.4 million profit. The Lower East Side Credit Union, also a non profit organisation giving out sub prime loans had a delinquency rate on its portfolio of mortgages and consumer loans of 2.3% and no foreclosure. Another Faith Community United Credit Union, Cleveland, now have $10 million in assets. These ethical sub prime lenders were definitely showing the way on how to lend money to the 'minorities and risky folks' and still keep their earn. So what's the recipe to avoid financial disaster while at the same time be able to provide a roof for these 'unfortunate' outcast groups? The answer is as what Linda Levy, the CEO of Lower East Side Credit Union puts it, 'We're in business to improve people's live and do asset building at the same time. Of all the borrowers of Homewise, Santa Fe, New Mexico, which lends to risky groups of first time working class home buyers and immigrants, only 0.6% of its loans were 90 days late, as compared to 2.35% of the sub prime nationwide standards. Its downright attitude of the lender and the borrowers. If a custo ...