Lewis Ranieri, once known as the father of mortgage finance, is daring to revisit the most infamous sector of the mortgage market—subprime lending. Four years ago, sky-high defaults on subprime mortgages—used mainly by borrowers with weak credit profiles—touched off the global financial meltdown, wiped out hundreds of financial institutions world-wide and destroyed billions of dollars invested in mortgage-backed securities.
Today, lawsuits against Wall Street firms from investors burned by souring mortgage securities continue to meander through the courts. Yet Mr. Ranieri believes now is the time for nontraditional lenders to enter the market. While the bank-lending standards that created the mortgage crisis were too loose during the housing boom, they are now too tight, Mr. Ranieri says, reducing the supply of mortgages to average borrowers and opening a door for lenders like Shellpoint Partners LLC, a mortgage-finance company he recently founded with two partners.
From Yahoo Finance
Today, lawsuits against Wall Street firms from investors burned by souring mortgage securities continue to meander through the courts. Yet Mr. Ranieri believes now is the time for nontraditional lenders to enter the market. While the bank-lending standards that created the mortgage crisis were too loose during the housing boom, they are now too tight, Mr. Ranieri says, reducing the supply of mortgages to average borrowers and opening a door for lenders like Shellpoint Partners LLC, a mortgage-finance company he recently founded with two partners.
From Yahoo Finance
