Toxic Loans in America Infect International Markets

Press Release (PDF)

Statement by Kirsten Keefe, Americans for Fairness in Lending Executive Director:

“The lending industry house of cards built with unstable subprime mortgage products has finally collapsed – with devastating consequences for both the American and global economies. Quick steps by the US Federal Reserve and central banks in Europe, Japan and Australia may alleviate an immediate crisis, but the castle has certainly fallen and the full impact is yet to be seen.

“Why did this happen? Investors, lenders and regulators all have a hand in the mess. Overeager Wall Street investors poured billions into asset-backed securities (ie. mortgages) ignoring real property values. Meanwhile the lenders were making huge profits on loans made without regard for borrower ability to repay. And federal regulators are at fault for failing to regulate or even monitor the frenzy, despite ongoing warnings from advocates and economists. One thing is certain in the midst of the mayhem – ‘we the people’ are the real losers.”