by Calculated Risk on 1/26/2007 10:36:00 AM

“The market is paying me to do a no-income-verification loan more than it is paying me to do the full documentation loans. What would you do?”
William D. Dallas, the chief executive of Ownit Mortgage Solutions, Jan 26, 2007

From the NY Times: Tremors at the Door

Wall Street’s big bet on risky mortgages may be souring a lot faster than had been previously thought.
...
The grim statistics ... also indicate that mortgage lenders became more generous last year, giving 100 percent financing and allowing borrowers to state their incomes with little or no documentation in an effort to bolster volume, according to industry experts.

Banking regulators have increasingly voiced concerns about the loosening of lending practices by subprime lenders. Late last year some demanded that applicants be more closely vetted before being qualified for adjustable-rate and other risky loans.

Yet, housing advocates and industry experts say policy makers are also worried that too sharp a pullback in lending by Wall Street and commercial banks could cut off consumer access to credit.