Ratings Agency Calls for More Credit Discipline

Moody's Investor Service is concerned that a tidal wave of capital into mortgages has relaxed credit for high-risk loans. In response, the ratings agency is stressing that more credit discipline is needed to avert a crisis. Moody's specifically cites growth in commercial mortgages, which have reached 15 percent of the gross domestic product, as a particular source of concern.

The 15 percent mark ties the record high set in 1988, the peak of the previous real estate cycle.

Source: Investor's Business Daily, (02/02/06) via RealtorOnline

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