NC State Economist Mike Walden – “Are We Repeating the Mortgage Mistakes?”

Mary:  I’m Mary Walden, with economist MW, welcoming you to the economic perspective.   Today’s program asks if we are repeating the mortgage mistakes of the past.  Mike, many analysts say it was lax lending standards for home mortgages that led – at least in part – to the financial collapse of 2007 and 2008.   Now that the economy is on the mend and borrowing is increasing, are those kind of lending practices being avoided?

Mike:  Summary Answer

  1. Largely yes
  2. Worry is about so-called subprime mortgages – lending going to the highest risk borrowers
  3. Reports suggest more subprime borrowers are trying to take out home loans
  4. But, the majority of banks report they are NOT increasing subprime lending and they are NOT reducing standards for those loans
  5. Instead, they are relying on an improvement in jobs and income to generate new business
  6. I’m MW

Mary:  And I’m Mary Walden for the North Carolina Cooperative Extension Service

A native of the Texas Panhandle, Rhonda was born and raised on a cotton farm where she saw cotton farming evolve from ditch irrigation to center pivot irrigation and harvest trailers to modules. After graduating from Texas Tech University, she got her start in radio with KGNC News Talk 710 in Amarillo, Texas.