Subprime lending returns, now colored green

April 6, 2009

As we continue to dig out of the mess caused by liar loans and other subprime hijinks, the New York Times reports that “green banks” are springing up.

How will green banks decide to lend money? In the case of the start-up e3bank,

Instead of following the industry standard — basing loans on a borrower’s ability to pay and the up-front costs of the building — e3bank officers will be authorized to modify debt-to-income and loan-to-value proposals. Financial products would be tailored to account for the up-front costs of more expensive green projects but also factor in cost savings from lower energy consumption that would be netted over the course of the loan.

Looks like there won’t be any rest for the weary FDIC.

One Response to “Subprime lending returns, now colored green”

  1. rbg1138 Says:

    So when will the green bubble pop? I am thinking sooner rather than later.

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