How to Stop the Drop in Home Values?

Osmium Steele · 10-14-11, 12:12 PM

Everything you stated is accurate. What you left out was the securities were created in response to lenders accumulating the bad paper, not before. They were structured to get the loans off the books and help the lenders remain profitable. Thus, they were a symptom.

Now, why would lenders knowingly make increasingly large numbers of subprime loans, killing profitability, prior to having a way to unload them? Fannie and Freddie largely stopped taking sub-prime loans around this time.

Keep digging.

10-14-11, 12:12 PM	#12
Osmium Steele Ace of the Deep Join Date: Apr 2011 Location: Upper midwest USA Posts: 1,101 Downloads: 22 Uploads: 0	Everything you stated is accurate. What you left out was the securities were created in response to lenders accumulating the bad paper, not before. They were structured to get the loans off the books and help the lenders remain profitable. Thus, they were a symptom. Now, why would lenders knowingly make increasingly large numbers of subprime loans, killing profitability, prior to having a way to unload them? Fannie and Freddie largely stopped taking sub-prime loans around this time. Keep digging. __________________ In the month of July of the year 1348, between the feasts of St. Benedict and of St. Swithin, a strange thing came upon England... My U297 build thread