Subprime lenders in bankruptcy should be ashamed of themselves

Speaking of bankruptcy, the five (at least) subprime lenders now in bankruptcy should perhaps observe their own obligations more closely. These lenders are pretty much in the same position as the freewheeling, irresponsible borrowers who file bankruptcy as often as possible that the credit industry likes to complain about. These lenders made tens, hundreds, or thousands of irresponsible loans they knew had little chance of ever being paid off.

And given the way they got here, the subprime lenders in question (New Century Financial Corp., Ownit, Mortgage Lender’s Network, People’s Choice Home Loans, and ResMAE Corp.) may be liable to their borrowers for violations of various state and federal laws. Consumers may be able to receive compensation through bankruptcy, but it is no easy process. Credit Slips proposes several ways consumers may be able to get partial compensation through bankruptcy, but it looks like other victims of these lenders’ practices may be left out in the rain.