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To: carranza2 who wrote (26756)	12/23/2007 10:43:20 AM
From: Ilaine	Respond to of 217630

underwriting standards for ARMs were absurdly lax Outright fraud by independent mortgage brokers and sleazy realtors and scumbag appraisers while the rest of the industry held out their hands for the money and looked the other way. Reminds me so much of the dotcom boom.

To: carranza2 who wrote (26756)	12/23/2007 10:53:23 AM
From: KyrosL	Respond to of 217630

Yes, that was another Greenspan error. His insistence there was no bubble, and his hands-off attitude, even if there was. Although, that may just have been confidence building PR, which i guess is the main job of the Fed nowadays.

To: carranza2 who wrote (26756)	12/23/2007 12:49:57 PM
From: Metacomet	Respond to of 217630

The ARM concept itself is not at fault. In return for the borrower sharing the near term interest rate risk, they are granted a lower initial rate on a mortgage loan. Especially if the borrower anticipates moving in a relatively short time frame, it is a good arrangement. And when there are rate caps built in, as in majority of ARM's, like a 2% annual increase and 6% life of loan cap, payment risk was easily anticipated. The problem came when lenders were allowed to stop evaluating the ability of borrowers to meet other than the initial rate, coupled with gaming future rates to maximize formerly usurious returns. Which was then supplanted by the mortgage originators merely needing to verify that he applicants were breathing, the balance of the application process could be imaginary. Like everything else negative that has happened to the US this decade, the genesis for this debacle can be traced to a government that encouraged and abetted unbridled greed in the name of "free enterprise".