It is not just a round of gossip but the truth that the largest mortgage house in US, Countrywide Financial Corporation is being questioned by the authorities for having been involved in securities fraud related to the foreclosure debacle sweeping the nation. The news has been reported by The Walls Street Journal. It is being probed whether the managers of the company were above aboard in their financial statements and quality of the loans. The spokesperson of Countrywide told New York Times that the company did not know anything about these investigations.

In Minnesota the region is dotted with foreclosures from Bronx to Boston and then on to St. Paul. Legislators are not willing to wait and have already introduced a bill that will require the lenders to postpone mortgages made on sub-prime loans for a year. Jeremy Kalin, speaking on behalf of the state said that the state cannot be mute spectators to the devastation of swelling numbers of families affected by foreclosures.

The delinquency rates of the nation of all mortgages have rocketed to about 6% (5.82% to be precise) – it being a record since 1985. When a loans falls behind a month in repayment it is said to have gone into delinquency. In sub-prime loans the delinquency rate is 20% - a shocking figure. Hand in hand with this the house prices are falling. About 9 million (8.8 million) house owners will not have any equity on their properties; in some case the loan amount is more than the value of the house. The gravity of the situation made fed chairman Ben Bernanke comment that ‘more can and should be done’. But it seems to be noise only – the Bush administration does not have any new plans. Rather the attitude is that the taxpayers should not bail out either lenders or borrowers. This has been clearly stated by Dan Perino, on behalf of the White House. Barney Frank, a Congressman heading Financial Services Committee was more forthright and said categorically that borrowers made bad decisions and why should this cause worry. But if nothing is done then not only them but the whole economy will suffer. He is initiating a legislation that will help those lenders who reduce the amount of loans that have gone delinquent. This will enable borrowers to become current. Critics are strident in commenting that action must be swift and quick to be effective.

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