NOW Paulson wants to do something about predatory mortgages

Treasury Secretary Henry Paulson wants tougher mortgage lending rules. I’m not against that at all, but, it’s been nearly two years since you took office. Even as the subprime market was starting to implode, we had predatory lenders still seeking out easy marks, and nothing was being done.

Hell, for that matter, how much money did Goldman Sachs make in financial derivates related to predatory lending, when you were running it?

That said, let’s get to what he does want.

“Regulations needs to catch up with innovation and help restore investor confidence but not go so far as to create new problems, make our markets less efficient or cut off credit to those who need it,” Paulson said.

One is “strong nationwide licensing standards” for mortgage brokers. Nice, but won’t happen without a huge fight that Paulson’s boss has no interest in, in terms of political philosophy.

Tougher oversight of mortgage originators, including things such as mortgages offered without income checks, etc.

Better due diligence on originators of securitized mortgage-based credit issuers. Good luck, there. I assume you’re talking about the CDOs and other alphabet soup financial derivatives that have recently gained notoriety. They’ve been around more than a decade. Even if Goldman Sachs didn’t have a lot of exposure to them, I didn’t hear any big worries about them from you when you were in the private sector.