Paulson: Housing woes take bigger toll on economy than expected
Updated: 2007-10-17 16:32
In view of the lax practices and allegations of fraud in the lending industry, Paulson said mortgage lending practices need to be more controlled.
"We need to bring a higher level of integrity to the mortgage origination process," he said.
"The development of a uniform national licensing, education and monitoring system for all mortgage brokers is worth considering."
Additionally, Paulson said more scrutiny is needed of credit rating agencies in view of the failures of mortgage securities, many of which had strong investment ratings despite the inclusion of risky loans.
"It is clear that we must examine the role of credit rating agencies including transparency and potential conflicts of interest," he said.
"We must also assess if regulations and supervisory policies are encouraging an over-reliance on ratings by financial institutions and investors."
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