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Politics : GOPwinger Lies/Distortions/Omissions/Perversions of Truth
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To: TimF who wrote (145974)11/6/2008 2:18:24 PM
From: geode00  Read Replies (1) of 173976
 
When you have a no doc loan you are not stating income so there is nothing to lie about by definition. The PROFESSIONAL lender does not have to provide a no doc loan or, if the property is worthwhile, the down payment is high and the credit report is good, provide a no doc loan at a higher rate to account for risk. I know people who use no doc loans because they don't want someone snooping into their accounts and they can afford a big down payment and have excellent credit. It would be foolish to get rid of this vehicle since they are not high risk even though they carry a premium on the rates.

The problem with the mortgage market was not the provision of no doc loans which have been used for a long time but the securitization of mortgages creating a risk-free (or low risk) fee-generating vehicle for those making the loans.

That's just it. The amateurs have paid through the nose for their mistakes by demolishing their credit and losing their home and whatever they have put into it. The professionals walk away with their fees and commissions and, sometimes, a government bailout for their sorry rear ends.

The amount going to the professional gamblers is much larger than that going to the amateurs. There is also a problem of massive fraud on the part of the professionals. There is fraud (see Countrywide's multibillion dollar settlement) on the part of those who made the original loans and those who were buying and selling the CDOs based (loosely) on those loans.

As I have said before, this is not just about mortgages. The CDO's include commercial loans as well.
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