I posted a comment. I think we should have never loaned (given ) money to financial institutions who got in trouble for loaning too much to too many unqualified buyers.
I got this response. "The real estate melt down wasn't caused by people who were given loans they didn't qualify.
This is another right-wing lie."
To this comment I say, bovine manure! What caused it if it weren't poorly qualified buyers being given loans which ultimately they could not repay?
There were and still are a rash of home foreclosures because there were way too many people who were given loans (many backed by Freddie and Fannie) to people who should not have qualified. Many (but by no means all) of these loans were forced by regulations passed by the Federal government.
Derivatives (bundles of loans) wouldn't be a bad idea IF the loans were well thought out loans and the borrowers were well qualified. But when you stick a bunch of bad loans in with good ones you are asking for trouble.
Fannie and Freddie were responsible for insuring many of the bad loans. And they were doing much of the bundling. Fannie and Freddie being government backed put us (you and me) on the hook for every loan that went sour. If I were Prince of the planet any loan insured by a government backed entity would lose that insurance if it were bundled. And NO loan would be insured unless the borrower were proven qualified.
Yeah the big money lenders weren't doing their job. And I firmly believe they knew they were taking big risks. They were gambling. So why were Fannie and Freddie even involved? Why did the government bail out gamblers?
I got this response. "The real estate melt down wasn't caused by people who were given loans they didn't qualify.
This is another right-wing lie."
To this comment I say, bovine manure! What caused it if it weren't poorly qualified buyers being given loans which ultimately they could not repay?
There were and still are a rash of home foreclosures because there were way too many people who were given loans (many backed by Freddie and Fannie) to people who should not have qualified. Many (but by no means all) of these loans were forced by regulations passed by the Federal government.
Derivatives (bundles of loans) wouldn't be a bad idea IF the loans were well thought out loans and the borrowers were well qualified. But when you stick a bunch of bad loans in with good ones you are asking for trouble.
Fannie and Freddie were responsible for insuring many of the bad loans. And they were doing much of the bundling. Fannie and Freddie being government backed put us (you and me) on the hook for every loan that went sour. If I were Prince of the planet any loan insured by a government backed entity would lose that insurance if it were bundled. And NO loan would be insured unless the borrower were proven qualified.
Yeah the big money lenders weren't doing their job. And I firmly believe they knew they were taking big risks. They were gambling. So why were Fannie and Freddie even involved? Why did the government bail out gamblers?