“ROBO-LENDING.” Amar Bhide had a valuable article in the weekend Wall Street Journal (November 13) which uses the useful word “robo-lending” to describe the process that led to the current foreclosure difficulties. He contrasts the old way of mortgage lending, in which the loan-officer made decisions on a case-by-case basis, taking into account a number of criteria, with the formula-based model which was used in the last few years. In the old model, a foreclosure would be based on personal knowledge of the circumstances. In the new model, banks confronted with troubled mortgages are “trapped between their contractual obligation to security holders to foreclose and the legal requirement for case-by-case review.”

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