The government didn't come up with negative amortization loans, no documentation loans, interest only loans. The government didn't force mortgage brokers to give mortgages to people 30 time greater than their income. The mortgage brokers came up with that on their own.
I didn’t say the government didn’t directly cause everything. Businesses can manage to jump to the next step on their own. But they’d never be able to do it and not notice that they weren’t making money without the easy money, and easy money is the state’s baby.
That should be, “I didn’t say the government directly caused everything.”
“The government didn’t come up with negative amortization loans, no documentation loans, interest only loans. The government didn’t force mortgage brokers to give mortgages to people 30 time greater than their income. The mortgage brokers came up with that on their own.”
No, but borrowers salivated at the thought of them. And took them out in HUGE numbers. Here are subprime loans in California only (mostly in the inner-city and out in the Inland Empire). The second number is % ARM.
2001 63.6% 51,719
2002 60.4% 77,827
2003 54.6% 154,601
2004 57.2% 223,690
2005 72.4% 195,118
2006 66.8% 160,612
2007 64.9% 28,831
So, we peaked subprime originations in 2004 with a quarter of a million loans with over half being ARMs. Housing market started to cool in 2005 and ... kaboom!!!!