The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: neolib who wrote (149238)	9/23/2008 12:52:30 AM
From: patron_anejo_por_favor	Read Replies (3) of 306849

There were Ponzi elements to the debt pyramid at large, including housing. However, there was also fraud involved, both of the criminal variety, and a more subtle type that resided just within the boundaries of law. For any Ponzi to work, the buyer at the bottom has to be mislead about what he is paying for. Sometimes this is illegal (ie, crooked realtors and appraisers bidding up house prices and then shoehorning a buyer witting or otherwise into an unsuitable loan), sometimes people simply bought at the top of a hot market....without realizing the risk that was not disclosed. Regulation and disclosure would help this, but at some point people do have to look out and be skeptical for themselves. Personally, I'd love to rid the U.S. of all but the most basic forms of securitization and have banks and loan originators keep the bulk of loans they make on their own books. But nobody made me G*d yet, so it probably won't happen (although the trend is more in that direction for the first time in history).

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