In this scheme, if you didn't have the AAA ratings making those securitized mortage so easy to move, then you don't have an incentive to give out so many subprime loans because you're actually on the hook for them.
See its not just the loan. Its the fact that they were able to repackage their bull in a rose scented packaging and convince everyone who would listen that their really didn't stink. There was a huge systematic con job.
Not to mention, CG, that there was also a huge element of predatory lending involved in this. Not all the sub prime mortgages sold went to people who were sub prime risks. They were needlessly stuck into mortgages that made them pay more at higher interest rates for the benefits of the banks.
Now, obviously the person who falls into such a trap does so out of ignorance or stupidity, but god damn if setting that trap to begin with isn't criminal.
Manny, now that you are actually doing research on this, how can you possibly still give Fannie and Freddie a pass? They were right in the middle of it and were the "fence" that connected sellers with buyers...
I don't think I ever gave them a pass at all. If I remember correctly in all the debates I had you and a lot of other people wanted to put the blame on them squarely. Thats not the case at all.
This, though more so feeling they are responsible for poor loans than the two coming together in the first place.
Just as an individual should be responsible about loans they can and can not afford, the bank rep should be responsible about loans they should and shouldn't hand out. All the "liar loans" going around in the early 2000's would've been defeated rather easily if the bank cared to do due diligence. But that would've cut into profit.
The problem is that if our economy is going to be held hostage by the willingness of idiots to take bad loans on then we're pretty much ed because a banker with motivation can easily find a client they should not give a loan to who will take it.
That's another point that hasn't been brought up; it's a lot easier to hit force the individual to pay then the banks (obviously, history has proven that out.)
So if the banks are TBTF and accept taxpayer money, then they should accept some form of taxpayer control. (I know you're not a fan of TBTF coyote, this isn't directed at anyone in particular.)
Manny, do you actually KNOW any bankers? I do...
Their business at the retail/commercial loan end is so damn regulated and over supervised now it's a wonder they EVER get a loan funded.
Devil's Advocate comment: You're assuming that they fill out all the paperwork correctly, and that someone is actually performing oversight...
Seriously, it seems like they are constantly being audited. A lot of deserving people aren't getting loans because they are busting the nuts of the retail bankers. If they aren't PERFECT they aren't getting approved.
Yeah, that might sway me if we hadn't just had a huge housing bubble fueled by sub prime loans. There is no way they're even close to being regulated enough.
Manny, it's not the RETAIL LEVEL bankers that were the criminals. That was happening in Washington DC and New York.
Thats just bull , CC. You're telling the mortgage brokers working for Countrywide didn't push bad mortgages? Really?
I'm fairly shocked you can say this with a straight face today.
Manny. of course they took advantage of the loan app INSTRUCTIONS that came from Fanny and Freddie. Give us a loan app with this basic info and we will buy it. It was an insiders game.
I'm talking about COMMERCIAL bankers. Not mortgage mills. The guys you go talk to if you want to start a small business. They are having writing loans on solid deals.
give me a break. Banks aren't regulated at all. That's like saying an execution is safe because their are rules and regulations governing how the executioner pulls the switch.
Banks won't be regulated enough until they are regulated out of business. The entire modern financial banking system is a farce.
That's probably a good thing. But if this was the case before, how did so many "liar loans" get approved? Is it just an example of the media hyping up a few isolated events?
Break up the banks into small enough pieces and this concern goes away. Make enough bad loans, you go bankrupt.
"Make enough bad loans, you go bankrupt."
The 100s of banks taken over so far (at FDIC/taxpayer expense), and the nearly 1000 banks still on the watch list are all smaller banks, since taxpayers bailed out all the TBTF banks, which were all bankrupt.
Couldn't agree more. Good luck getting past that lobby, though. Obama turned out to be just like everyone else and didn't do .
Yep. Sucks to be us.
The financial sector is unstoppable, has so much power, complexity, opacity that it can't be regulated.
And such power is never given away voluntarily. It must be taken away. And compromised/owned govt won't take it away.
So what/who's left to reduce the unimaginable power of the financial sector?
There are currently 1 users browsing this thread. (0 members and 1 guests)
Posting Permissions
Reply With Quote
