Re: US Government Made $100 Billion in Improper Payments
posted at 7/9/2014 11:56 PM EDT
In response to high-road's comment:
In response to WhatNowDoYouWant's comment:
In response to ComingLiberalCrackup's comment:
[QUOTE]The truth being, the mortgage collapse of 2008 was CAUSED by Government policies.....[/QUOTE]
As always, the truth is orders of magnitude more complicated than CLC says. As honest folk know, the mortgage collapse was caused by:
- (Yes), government policies. Specifically, both Republican and Democrat "home ownership society" policies that were directed at making it too easy for persons who shouldn't really be getting loans to get them.
- The banks who gave the loans. They aren't absolved just because there was a "government policy" out there.
- The people who took the loans. They aren't absolved just because it was possible to get a loan.
- The unscrupulous and vile finance persons that repackaged the loans to hide the risk and kept doing it until even they didn't know what they were selling.......and who often then went and shorted the market to boot. (These guys take a huge amount of the blame).
- The financial deregulators who made that even easier.
The bankc that were subject to the CRA comprised less than 10% of all mortgages and they had a lower default rate than loans originated by mortgage companies.
Mortgage companies, which comprised 70% of the market, were not subject to CRA oversight.
Private mortgage lenders are wholly responsible for their own credit requirements, there is no federal regulation or policy that affects or mandates the creditwothiness of borrowers or the terms of the loans that mortgage companies can or must write. It is entirely up to each lender as to how much risk they wish to assume with each lender.
It is up to the lenders to do their due diligence and verify all applications.
The only argument that could be made is that the federal gov't didn't set minimum standards for these no-doc loans.
But the democrats forced Lehman bros to finance risky 30 year investments with overnight loans. They forced Lehman bros to force mortgage companies to sell them risky mortgages.
it wasn't just the risky mortgages, it's was mixing the risky mortgages with prime mortgages, making the entire pool risky. And then financing the risk with extremely short term borrowing. And then getting the worlds largest insurance company to insure all of it. what they did was beyond stupid, except for one thing - they got rich doing it.