NEW YORK CITY—In his most recent column, Ethan Penner discusses the problems of decreasing home mortgage standards, and suggests that the return of easier money in home finance may be toxic to the overall financial system.

With the recent announcement that Wells Fargo will lower its credit standards for home loans in response to a decline in originations, Penner questions how the 28/36 ratio standard for loan approval was allowed to deterioriate. He examines the benefits of the original formulation, and examines the potential long term economic and societal impacts of the tighter financial scenario brought upon the prospective homeowner. Penner looks at who benefits from the extra lending, and how the proliferation leads to market expectations unmoored from financial realities.

To read the full post, "Mortgage Debt," click here. For more from Ethan Penner, click here.