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Investment banks were not limiting themselves to what the GSEs considered "conforming loans." Investment banks had build their own mortgage pipelines (originating, servicing, securitizing, selling to investors) and the targeted subprime mortgages. Again the Investment Banks set their own standards for which mortgages they would deal with.
Because the GSEs were buying subprime mortgages. The GSEs set the lending standards everyone else was following.
But hey, you have people here who think that the GSE's lent money to people and that HUD regulations controlled what Wall Street was doing. It's all just mind-boggling.
Because the GSEs were buying subprime mortgages. The GSEs set the lending standards everyone else was following.
Sorry, but your lack of understanding the complete situation is showing. Lehman, Merrill and other Investment Banks setup pipelines for mortgages that didn't involve the GSEs.
BY 2005, Merrill was in a full-on race to become the biggest mortgage player on Wall Street. A latecomer to the arena, it especially envied Lehman Brothers for the lush mortgage profits that it was already hauling in, former Merrill executives say. Lehman had also built a mortgage assembly line that Merrill wanted to emulate. Lehman made money every step of the way:by originating mortgage loans, administering the paperwork surrounding them, and packaging them into C.D.O.’s that could be sold to investors.
Eager to build its own money machine, Merrill went on a buying spree. From January 2005 to January 2007, it made 12 major purchases of residential or commercial mortgage-related companies or assets. It bought commercial properties in South Korea, Germany and Britain, a loan servicing operation in Italy and a mortgage lender in Britain. The biggest acquisition was First Franklin, a domestic subprime lender.
The firm’s goal, according to people who met with Merrill executives about possible deals, was to generate in-house mortgages that it could package into C.D.O.’s. This allowed Merrill to avoid relying entirely on other companies for mortgages.
That approach seemed to be common sense, but it was never clear how well Merrill’s management understood the risks in the mortgage business.
and the ones who are retiring are not in as good of a boat as most think
but the facts still remain
FACT: number of americans turning 65 (average age most people retire) daily.....6,000-8,000
number of americans turning 18 (the average age for people ENTERING the workforce(BLS uses 16)) daily...... 13,000
and the "'millennials " are a BIGGER generation than the boomers, or gen x
My wife retired, 3 years ago at 55, after 30 years at the same company. I could have a few years ago, but I still enjoy my job. Those who plan, thrive. Those who don't, need every bit of help they can get.
But,
Added to those who retire, in 2012, 500,000+ people died who were between 20-60, and a large portion of them were working at the time. I am pretty sure that number hasn't changed. Come to your own conclusion.
To go into further detail, until shortly after deregulation occurred (Glass-Steagall repeal) the mortgage industry never failed as a whole.
Like I said you don't know much about economics since you don't know the cause. The cause was little to no down payment loans to people who didn't normally qualify.
You can't even make a good argument that partial repeal was a symptom.
AIG
Bear Stearns
Lehmen Brothers
Merril Lynch
Goldman Sachs
WAMU
Wachovia
Countrywide Financial
Not ONE of these companies combined investment with commercial banking.
Quote:
Originally Posted by dv1033
I think there's just a disconnect to where I say the mortgage industry wanted more loans, more commission, more government mandates and you say the mortgage industry was just an innocent bystander until a bully came around.
No I didn't. I'm saying it doesn't matter. Treat the cause, don't make little to no down payment loans to people who didn't normally qualify.
Like I said you don't know much about economics since you don't know the cause. The cause was little to no down payment loans to people who didn't normally qualify.
Among other things.
Quote:
Originally Posted by Loveshiscountry
Treat the cause, don't make little to no down payment loans to people who didn't normally qualify.
Among other things.
You don't know much about economics if you think there's only one cause.
You don't know much about economics if you think there's only one cause.
There is only 1 cause. Easy credit yet again. Anything else is a symptom at best, could have made it worse, but not the cause.
Don't make little to no down payment loans, loans which lenders rarely made in the past, and we don't have a crash. THAT is the cause, period!
Next......
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