IN THE Dec. 9 letter “Government, borrowers overreached, but lenders get blamed,’’ about Massachusetts’ lawsuit against major lenders, a reader asks: “What is wrong with this picture?’’ What is wrong is the reader’s facts. Before the financial meltdown, the vast majority of subprime loans were private. Banks’ computer models showed that more money could be made by lending to borrowers with poor credit at high interest rates than by lending to the creditworthy. Banks also engineered the offloading of risk onto other investors through an alchemy-like process that turned junk loans into AAA bonds. And thus, a few were enriched while millions of homeowners were injured.
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