implode-explode.com - Implosion News Pick-ups: Securitization Shouldn't Be the Government's Business

``Securitization discourages lending that can't be easily mechanized: Banks lose interest in making loans to small businesses. Troubled loans end up in needlessly destructive foreclosures or lawsuits because a one-on-one negotiation between a lender and a borrower is impossible.
It's one thing to securitize credit that can't be extended by a bank. Without railroad bonds there would have been no railroads. But the issuance of railroad bonds wasn't mechanistic: Investors expected underwriters to perform due diligence on each borrower. ''

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Relevant: Securitization Group Launches Code to Track Loans HAMP, IT'S SUCCESSES AND FAILURES Capital Shocks Sharply Reduce Bank Lending to Small Businesses TIME Asks “Will Bankers go to Jail for Foreclosure-gate?” Volcker's Vision of a Return to Narrow Banking	Securitization Shouldn't Be the Government's Business 2012-09-11 — bloomberg.com ``Securitization discourages lending that can't be easily mechanized: Banks lose interest in making loans to small businesses. Troubled loans end up in needlessly destructive foreclosures or lawsuits because a one-on-one negotiation between a lender and a borrower is impossible. It's one thing to securitize credit that can't be extended by a bank. Without railroad bonds there would have been no railroads. But the issuance of railroad bonds wasn't mechanistic: Investors expected underwriters to perform due diligence on each borrower. '' read original article \| permalink to this page \| discuss \| \| RSS \| Subscribe by email! Comments: Be the first to add a comment add a comment \| go to forum thread

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Securitization Shouldn't Be the Government's Business