"Now The Trap Has Sprung"
Those socialist pantywaists over at Business Week are all worked up over the perfectly reasonable practice of gulling thousands of homebuyers into mortgages that leave them "upside down -- meaning borrowers' homes are worth less than their debt." Despite their pathetic mewling about how banks are motivated to flog these crazy schemes (about which every emptor should clearly caveat with a vengeance), the Marxists running the real estate desk at BW couldn't stop some of the square-jawed American free-market truth to shine through their pink-stained lament:
Analyst Frederick Cannon of Keefe Bruyette & Woods says most banks don't apologize for their option ARM businesses. "Almost without exception everyone says [the option ARM] is a great loan, it's plenty regulated, and don't bug us," he says. In an April letter to regulators, Cindy Manzettie, chief credit officer for Fifth Third Bank in Cincinnati, said it's not the "lender's responsibility to help the consumer determine the appropriate payment option each month.... Paternalistic regulations that underestimate the intelligence of the American public do not work."