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There's where the real trouble started and those didn't become "hot" until the mess came to a head. MBS in and of itself is fine within the context of the "quality" of the loans. Especially that the loans are properly categorized for risk. Lowering the requirements (at the government's urging) started the train... then ARMs, teaser rates, HELOCs, and outright fraud with liar loans ran it right off the tracks.
It's like the guy who gets his car stolen when he left it running to go into the store for a sec... Do you penalize the guy as an enabler for "trusting the system and not watching out" or the guy who stole the car?
MaM - great series of rebuttles! Why let a few pesky facts get in the way of someones agenda?
"Facts" are subjective in the context of MaM's posts here...
Just because the GSEs securitized loans since inception doesn't justify how the banks went into an unregulated derivative frenzy chasing yield. It's not reasonable to expect the kind of returns they promised investors on fancy instruments that were just dressed up garbage. If you educate yourself a bit on exactly how the game is played after a loan is closed, then you'd understand how we all got played in the end.
To put it in a better context for someone in the RE profession, it's like the hacks who buy foreclosures and hide the issues behind new drywall and paint. You walk into the house and everything looks awesome and updated - meanwhile there's faulty wiring and mold sitting behind the facade. This is exactly what was done when the loans were bundled and sold to investors. That was not the intention or the spirit of the investments to be made when HUD and these GSEs were formed.
"Facts" are subjective in the context of MaM's posts here...
Just because the GSEs securitized loans since inception doesn't justify how the banks went into an unregulated derivative frenzy chasing yield. It's not reasonable to expect the kind of returns they promised investors on fancy instruments that were just dressed up garbage. If you educate yourself a bit on exactly how the game is played after a loan is closed, then you'd understand how we all got played in the end.
To put it in a better context for someone in the RE profession, it's like the hacks who buy foreclosures and hide the issues behind new drywall and paint. You walk into the house and everything looks awesome and updated - meanwhile there's faulty wiring and mold sitting behind the facade. This is exactly what was done when the loans were bundled and sold to investors. That was not the intention or the spirit of the investments to be made when HUD and these GSEs were formed.
My responses were to the broad generalization that all mortgage securitization was some new fangled, evil concept.
CDOs, while not a new, are a different animal and combined with all else for the perfect storm.
Kool aid is the drink of choice during manic episodes, ya know.
Our current economic demise is about greed no disagreement, but the American consumer dove right in. While I lack any kind of compassion for the banks in their current predicament, the American consumer was just as materialistic. They can't sell those MBS's if the American consumer wasn't out there spending and refinancing and refinancing. The banks meet the demand created by the consumer. If the American public could figure out how to live within their means, this mess would be seriously blunted.
I've seen way to many RV purchases, nice cars, vacations, etc purchased on those refi's. The banks aren't the only greedy ones. There is no constitutional right to a Lexus.
Exactly. Too many people bought homes they couldn't afford, used them as ATMs and spent like crazy (often on credit) trying to achieve a lifestyle way beyond their means...eventually this came back and bit us all in the behind.
The general populace had a lot of responsibility for this whole mess as weel.
Exactly. Too many people bought homes they couldn't afford, used them as ATMs and spent like crazy (often on credit) trying to achieve a lifestyle way beyond their means...eventually this came back and bit us all in the behind.
The general populace had a lot of responsibility for this whole mess as weel.
What about those that didn't buy beyond their means, lost their jobs in construction and development and were set back 20 yrs.
Which is what happened to most of the builders, developers, suppliers, and workers.
Bankers destroyed lives, and they sit and make bonuses off of our pain and tax burden.
While vultures surround the foreclosed homes and broken lives of the ripped off and try to profit.
What is more sick?
Getting ahead of your neighbor and countrymen is what will be (is) our downfall.
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