Quote:
Originally Posted by SteamWake
I will save them alot of time and money.
The current housing crisis was caused by banks whom were 'forced' to give home loans to people whom could not pay them back.
The origin of this debacle can be traced all the way back to Roosevelt but Jimmy Carter and Bill clinton put the program on steroids.
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Bull. The loan to securitize model is what pumped the system full of bad loans. Don't even bring up the long-debunked "CRA caused the crisis!" red herring. Banks weren't forced by the big bad government to make loans. And the ones they DID make under CRA were such a tiny percentage of the whole, not to mention less likely to default. No, the profit margin of making loans and turning around and selling them to Wall Street before they ever had to worry about the loan defaulting is what "forced" them to make the loans.
Besides, if it was truly a problem of just bad loans, we could have bought out every subprime loan in existence with the billions upon billions that have been thrown at the problem. But we're still feeling the after-effects despite that money going to Wall Street. That fact alone should tell you its something else.
If you want someone to blame, blame Greenspan's Fed for keeping rates too low for too long. Blame Phil Gramm for exempting derivatives from the Commodities Futures Modernization Act. Blame the overleveraging of firms like AIG, Lehman and Bear Stearns. But save me the CRA garbage.