Do you know who forced the lenders to make all of the bad loans?
eagle asked:
The Democrats in the house and the senate made the lenders give loans to people who were not qualified under the old rules to get loans. This is why there are so many forecloses today.
SlimMick does not know what he is talking about.
The Democrats in the house and the senate made the lenders give loans to people who were not qualified under the old rules to get loans. This is why there are so many forecloses today.
SlimMick does not know what he is talking about.
No one “forced” them to make the bad loans. It was, however, likely the fault of the mortgage brokers. They charged fees in points to people with riskier backgrounds. They made these points as profits and then sold a group of these loans to banks and investors. The investors pay a fee and also pay for the loans. In so doing they allowed the mortgage lenders to write more loans. This keeps going until people aren’t getting paid and no one is buying paper either because they don’t have the money from the incoming payments or because they have people defaulting and they have to foreclose and now they own the mortgage paper and the title to the home.
Dems or Republicans were not responsible for forcing it but our elected officials are accused with some pretty damning evidence that they ignored what was going on until it was too late.
And those who bought those homes were hoping that the price would go up–and at one time, they were going up.. and they can sell them to make a profit.
Well we know what happened.
This is a forum for questions on credit…not political rants…but since you brought up this issue: GOP ex-senator Phil Graham introduced the The Gramm-Leach-Bliley Act, passed under GOP control, which gutted New Deal banking regulations…which contributed to the collapse.
This legislation allowed banks to create mortgage-based securities for these sub-prime loans…This is where the funding came from. It was the collapse of these risky financial instruments that brought BearStearns (and others) down.
Who ever it was, they were very, very, greedy, and guess what it backfired, not only are people losing their homes, but their jobs, and taking their lives, so sad and shame to them who ever they are.