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Originally posted by jtma508
reply to post by Common Good
I'll take issue with the 'pressured banks into making subprime loans' statement. That is wholly untrue. There are lawsuits pending now against banks (mostly 'private-label' mortgage companies') that steered otherwise qualified people AWAY from conventional loans and into the subprime loans because of the significantly higfher profitability of those loans. There is an enormous amount of disinformation about the whole subprime debacle.
The people who had the legal repsonsibility of regulating and overseeing what was going on have a vested interest in convincing the masses that the whole thing collapsed because a bunch of hicks 'bought homes they knew they couldn't afford'. Whereas every authoritative source will tell you that it was driven BY Wall Street seeking more mortgage product with which to issue MBS's --- especially the lucrative subprime ones. The very organizations that have the responsibility to QUALIFY applicants were the ones skirting the rules, pressuring appraisers and falsifying applications in order to get 'liar loans' approved. And the VAST majority of these subprime loans originated OUTSIDE the realm of CRA.