More to it than just this but...In a nutshell, clinton threatened banks for being “racist”. It could not be that many inner city folks had bad credit and therefore could not get loans..it had to be racism. The banks were forced to make subprime loans and what do you know...low income people had a hard time paying them back. Thus it is all the republicans fault.
The real sub-prime lending didn’t go haywire until around 2004 or 2005. I know this to be a fact. Now, there were sub-prime loans for as long as I can remember but they were few and far between. But prior to 2004 you had to at least be breathing to get a loan. This crazy stuff went on for about 2 years before it came to a halt.
FHA 100% loans are only ending this month. And until last March or so your credit score didn’t matter as long as your back ratio was no higher than 50%. And I’ve seen some that were approved with a back ratio over 50%. Since then and through this month your score had to be 580 or higher to get 100% financing.
I blame Clinton as much as anyone but Bush could have stopped it.
Sub-prime only getting out of hand for a few years makes me think this goes much deeper than just a sub-prime mortgage crisis. It probably is very similar to the S&L schemes of the 90’s. The properties are way too inflated in California, Florida, Las Vegas and Arizona and the mortgages are not worth the paper.
Foreclosures here in Houston are only slightly higher than normal.
Do we know that most of the $700M is to cover loans made by low income people? I'd expect many middle income and wealthy people could have got over their heads as well. I'd welcome stats along those lines on who defaulted.