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Politics : Mainstream Politics and Economics
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To: koan who wrote (32175)10/23/2012 11:03:51 PM
From: Thehammer2 Recommendations  Read Replies (2) of 85487
 
I am in real estate. It was the banks, insurance companies, and wall street, more than anyone, who were the criminals. They cut the regulations for borrowing. No doc loans! AIG credit default swaps! Junk CDO's stamped triple AAA by Moodys!

This is a highly simplistic answer and is part of the problem but there are an number of other contributory causes such as the Community Reinvestment Act. Acorn with such co-conspirators such as BO threatened lawsuits against the major banks for redlining. Fannie and Freddie were buying the mortgages and Bush tried to get congressional action on multiple occasions. Last of all we had a classic bubble in housing caused by over zealous buyers, speculators, flippers etc. It was the real estate industry that was convincing buyers that they could afford more house than realistic and some of the agents were more interested in their commission than getting a client affordable housing. When the bubble burst it caused a banking and credit crisis.

BTW _ I worked on the securities side at one of the largest banks in the country and one of the largest in mortgage loan origination. I can tell you one thing - the bank side loves REGULATION. Because of their size, and the fact that they have scale and droves of attorneys, they believe it gives them a competitive advantage and will eliminate many of the smaller and mid size banks.
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