Ozark, Arkansas 1951

[togor]

A lot of the financial meltdown and the home lending/mortgage crisis came about because a lot of the old rules were jettisoned, the old rule that a mortgage would only be given to someone with a 20-25% down payment, the mortgage payments to be no more than 25% of family income, etc.

This was done for a simple reason: to keep the commissions coming. The housing boom went on so long, that they ran out of qualified buyers. So keep the loan commissions coming, they had to get into the pool of less-qualified buyers. To be able to resell those mortgages on the secondary market, they invented securities like CDOs in which to hide the poorly-rated mortgages. And then there was the derivatives market that bet on those CDOs, etc. And yes they did get bailed out even though so many borrowers lost their properties.

[RED]

This was done for a simple reason: to keep the commissions coming. The housing boom went on so long, that they ran out of qualified buyers. So keep the loan commissions coming, they had to get into the pool of less-qualified buyers. To be able to resell those mortgages on the secondary market, they invented securities like CDOs in which to hide the poorly-rated mortgages. And then there was the derivatives market that bet on those CDOs, etc. And yes they did get bailed out even though so many borrowers lost their properties.

They... they... they... they...

Democrats... Democrats... Democrats... Democrats

Of course tis was in Ozark Arkansas

[Gun Smoke]

Banks were loaning 2 and 3 times what homes were worth because the prices kept increasing. Many people were buying new houses just to rent out. Home owners used their homes as ATM's and the banks were glad to give them 2nd and 3rd mortgages w/o even checking for employment sometimes.

The prices kept going up but salaries did not. The banks had to have known that s**t was going to hit the fan soon.

Borrowers lost their properties? No, they never owned them since they never paid for them.

[Vern Humphrey]

Banks were loaning 2 and 3 times what homes were worth because the prices kept increasing. Many people were buying new houses just to rent out. Home owners used their homes as ATM's and the banks were glad to give them 2nd and 3rd mortgages w/o even checking for employment sometimes.

The prices kept going up but salaries did not. The banks had to have known that s**t was going to hit the fan soon.

Borrowers lost their properties? No, they never owned them since they never paid for them.

The banks did this because they could sell the mortgages for Fannie Mae and Freddy Mac. Basically, they made a few thousand dollars each time they did the paperwork.

At the same time, if they refused a loan they could be sued. At one time the Federal government threatened to sue banks that didn't have enough minority loans.