Yesterday's Wall Street Journal had a front-page article about Countrywide Financial Corp. and its loan delinquencies that got me thinking. The beginning of the article quoted all the problems with sub-prime loans and the delinquency rates. (Old news...but bad news sells papers.) However, buried in the article was the fact that "fast and easy" loans (no income verification/no documentation loans) through Countrywide currently have a lower percentage of delinquencies than do traditional full-documentation loans. This was attributed to the fact that, in order to qualify for "fast and easy" loans, borrowers need higher credit scores than they would for full-documentation loans. (Source: WSJ)
This leads me to my query: Assuming that the above is indicative of the industry as a whole, why are "fast and easy loans" disappearing along with sub-prime loans, thus penalizing small business owners who try to minimize their income through legitimate tax planning means?
Sounds to me like throwing the baby out with the bath water.
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