04/23/2009 05:12 am ET Updated May 25, 2011

AIG Continues Risky Lending Practices

On March 16, 2009 United Guaranty revised its standards for providing the first loss insurance that has caused so much pain...

Noteworthy is the fact that 95% mortgages are still available in 'Moderately Declining Markets'. That AIG is still providing 90% mortgages in 'Severely Declining Markets' is troubling. The loan caps are equal to the Agency's limits. One can be certain that the loans originated under these programs will end up in either Fannie Mae's or Freddie Mac's inventory in the next few months. The fact that AIG is continuing to expose the taxpayer to high risk mortgage lending and contributing to the losses at the Agencies is much more significant than the problem with the bonuses.

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