New Blog Covers Credit and Bankruptcy

Posted on July 30, 2006

A new blog called Credit Slips offers discussion and debate from seven academics about credit and bankruptcy. The blog launches at a time period when the economy is looking weaker, inflation is climbing and bankruptcy laws have been changed for the worse. Elizabeth Warren is one of the Credit Slips gang of seven. Warren recently announced the launch of Credit Slips in a post on TMP Cafe.

This week a Gang of Seven law professors and sociologists started a new blog, creditslips. (Upfront confessions-I'm one of the Gang.) The topics are tumbling out-pension reforms, medical bankruptcy, collecting from people even after they file bankruptcy and hurricane relief. Credit junkies who are regulars on Warren Reports will want to check it out.

The site also discusses mortgage loans and the housing market and has an interesting new post by Elizabeth Warren about the unregulated home mortgage market and the cooling housing market.

Now let's add a third dot to the picture-the impact of an effectively unregulated home mortgage market. Over the past five years, lenders have sold billions of dollars of mortgages that are designed to go into eventual default because the borrowers cannot possibly afford to pay them. These so-called "creative mortgage products" have two powerful effects: They fueled the boom, pouring more money into an overheated housing market. Now they will accelerate the bust, pushing more people out of their homes through distressed sales, thereby accelerating price collapses on the way down. In other words, a housing bust doesn't just happen. Regulators who won't regulate have an effect as well.

The blog will probably get a little wonkish at times but there is good stuff here for blog readers that want to learn something.