quote:
it was primarily people who couldn't afford homes taking out mortgages on those homes 2nd was the ratings agencies for committing fraud by intentionally overrated the MBS's 3rd was the banks for loaning people the money for the mortgages

And the securitization industry that facilitated the banks being able to continue loaning the money.

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Posted by Wtodd

Tampa, FL

Member since Oct 2013

67543 posts

Posted on 3/5/19 at 6:22 am to Mo Jeaux

The problem was and is....Credit Default Swaps......there was a time when a lending company would do a risk assessment on you to determine if you were a good risk to loan money to buy a house. For the past 30 yrs lending companies have been selling shitty loans that are packaged with other shitty loans to unsuspecting buyers......and making bank doing it. Very very few lending companies have been doing risk assessments, just giving people money bc they're going to sell the loan anyway so they DGAF if you're ever going to pay it back.

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Posted by SlowFlowPro

Simple Solutions to Complex Probs

Member since Jan 2004

425837 posts

Posted on 3/5/19 at 9:42 am to Mo Jeaux

quote:
And the securitization industry that facilitated the banks being able to continue loaning the money.

they wouldn't have been able to do this without the credit agencies. that's why i put them #2 (and they probably should be #1)

if those MBS's were given the proper risk assessment, the banks never make those loans (because the investment demand would have cratered)

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