Paulson: Foreclosures Inevitable money.cnn.com — Faced with record-high foreclosure rates, the Bush administration has
been scrambling to keep people from losing their homes, but many are beyond
help, Treasury Secretary Henry Paulson said. Lax lending standards that
accompanied the once high-flying housing market allowed people to buy homes
they could not afford, Paulson said. In remarks to a mortgage-lending forum,
Paulson said, "There is little public policymakers can, or should, do to
compensate for untenable financial decisions."
Lenders established lax standards so they could make second mortgages at subprime rates to defraud homeowners. When the rates rose, the owners could not sustain the payments.
Lenders broke the laws intended to protect consumers.