by W Thomas Payne

Created on: October 26, 2007

There are many perfectly honest, hard working people caught in the trap set for them by predatory lenders who should be protected by the government. But there are also those who were rolling the dice, much as those lenders were, who knew they were taking a gamble much like the stock market or Vegas who should take their lumps.

The federal government did nothing to regulate the industry for sub-prime mortgages, which by definition is a risky investment vehicle because lenders with more stringent underwriting wouldn't touch those loans with a ten foot interest table.

But were the middle class home buyers really to blame, lured in by attractive interest rates and apparently affordable payments? And I say lured, because most of them bought more house than a typical lender would let them purchase. If they had bought a home that was actually within their financial grasp, the crisis would not exist.

Home prices were pushed to the stratosphere by these lending practices, which relied on ever-spiraling higher values. It was a self-fulfilling prophecy without any basis in reality.

The federal government should block foreclosures, at least temporarily, while the situation receives intense scrutiny. Creating legions of homeless or near-homeless families should not be allowed to occur because of these lenders.

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