jcd11235 0 #51 March 28, 2009 QuoteQuote Unregulated derivatives traders, however, are a fairly recent phenomenon. Sure, there are other people at fault too (and those aren't aliens from Jupiter either). However ultimately the starting point was the guy who signed up for the mortgage he knew he cannot afford. Then it went to the banks, then to the Wall Street or Fannie, and now the rest of us is paying for that. It started before that. If no one had offered a mortgage they knew he could not afford, he couldn't have signed up for it, and the mortgage could not have been resold.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
Capt.Slog 0 #52 March 28, 2009 QuoteQuoteQuote Unregulated derivatives traders, however, are a fairly recent phenomenon. Sure, there are other people at fault too (and those aren't aliens from Jupiter either). However ultimately the starting point was the guy who signed up for the mortgage he knew he cannot afford. Then it went to the banks, then to the Wall Street or Fannie, and now the rest of us is paying for that. It started before that. If no one had offered a mortgage they knew he could not afford, he couldn't have signed up for it, and the mortgage could not have been resold. If the mortgages could not be "securitized" and taken off the immediate lenders' books, the immediate lenders would have exercized due diligence like they did in the past. As it was, the relaxed rules made it (short term) profitable for banks and especially brokers to make NINJA loans. And why did the ratings agencies like Moodys rate this crap as "AAA"? Quote Share this post Link to post Share on other sites
jcd11235 0 #53 March 28, 2009 QuoteIf the mortgages could not be "securitized" and taken off the immediate lenders' books, the immediate lenders would have exercized due diligence like they did in the past. As it was, the relaxed rules made it (short term) profitable for banks and especially brokers to make NINJA loans. Agreed. QuoteAnd why did the ratings agencies like Moodys rate this crap as "AAA"? They were selling securities, for one reason.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
georgerussia 0 #54 March 31, 2009 Quote It started before that. If no one had offered a mortgage they knew he could not afford, he couldn't have signed up for it, and the mortgage could not have been resold. But how could the bank know whether the person can afford a mortgage or not until the person provides them with some income value? Of course the banks did not check those numbers in some cases, and will pay for that. But at the end it's the people who applied for those loans and provided an inflated income figure.* Don't pray for me if you wanna help - just send me a check. * Quote Share this post Link to post Share on other sites
jcd11235 0 #55 March 31, 2009 QuoteQuote It started before that. If no one had offered a mortgage they knew he could not afford, he couldn't have signed up for it, and the mortgage could not have been resold. But how could the bank know whether the person can afford a mortgage or not until the person provides them with some income value? Of course the banks did not check those numbers in some cases, and will pay for that. But at the end it's the people who applied for those loans and provided an inflated income figure. The terms of the loans were in place before the borrowers signed. Sure, they should have read the terms more carefully, left themselves financial outs in case the terms differ from those discussed verbally, and more thoroughly investigated the potential effects of a downturn in the housing market. Still, lenders have a responsibility to their investors to engaging in responsible lending practices, including not lending money to people without first verifying their ability to repay. America's consumers have traditionally had a built in safeguard against over-borrowing. The banks generally wouldn't allow them to do so, because they wanted their money back. If the originating lender is not concerned with the borrower repaying, because he has plans to resell the mortgage, then that safeguard no longer prevents borrowers from borrowing too much money. It doesn't excuse borrowers for taking out loans they couldn't afford, but they accepted offers that never should have been made. The lenders screwed up when they offered the mortgages. Only after that did the borrowers have the opportunity to sign for a mortgage they couldn't afford to repay.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
kelpdiver 2 #56 March 31, 2009 QuoteQuote It started before that. If no one had offered a mortgage they knew he could not afford, he couldn't have signed up for it, and the mortgage could not have been resold. But how could the bank know whether the person can afford a mortgage or not until the person provides them with some income value? Of course the banks did not check those numbers in some cases, and will pay for that. But at the end it's the people who applied for those loans and provided an inflated income figure. We have laws in the buying and reselling of stolen goods. Quote Share this post Link to post Share on other sites
