Quote:
Originally Posted by goof2
I especially didn't like how home buyers were forced at gunpoint by those dastardly bankers to take out loans they couldn't afford. Wait, that didn't happen. 
Home buyers happily signed on the dotted line and obligated themselves to pay back loans they couldn't pay back. The banks certainly bear some responsibility for what happened but the individuals who by the millions took out loans and "stuck them in their greedy pockets" with little consideration about paying them back bear some responsibility as well.
This couldn't have happened without a lot of greed on both sides. |
This is true to an extent, but please rent the movie Inside Job to better understand the whole mess. It was more profitable to write subprime loans than conventional 30 yr loans because the interest rates were higher over the long term and yielded more profit when they were sold off. I believe many people were duped by loan officers for the sole purpose that banks did not care if the homeowner could pay after the fixed rate period. They packaged up these loans and sold them as CDOs to investors.
You wouldn't borrow 100k to your friend if you knew he couldn't pay...why would banks UNLESS they have had nothing to loose. The largest of greed came from the top.