AIG Sues Bank Of America For More Than $10B Over Mortgage Securities

[AVGWarhawk]

As I understand it, used to be someone had to have some sort of income before they could get a mortgage or a loan back in the '70's, however why worry about the borrower paying back there debts if you plan on selling it on to a bunch of saps? And that there was the problem

In part, yes. In the 70's one would have to save a substantial down payment before a loan was offered on said home. In the 80's the rules changed to basically breathing and having about 8% down. In the 90's, attempting to let everyone have the American dream all one would need is a barely registering pulse and a few bucks. As for the rest, yes sir, the loans banks offered knowing they would be sold off went on for years. These loans eventually going into default because people were provided loans based on a economy continually growing. Only those that have a fantastic credit report would be retained by the first originator of the loan. In short, no possibly way of becoming toxic. As we see, one hiccup and the domino effect started.