Some Questions on the Sub-Prime Mess

[Hillary'sMoralVoid]

I'm watching Dems spin the financial crisis on such shows as Oprah. They cite a lack of regulation of Wall Street and 'greedy" banks that wanted to take on sub-prime loans to somehow increase their bottom line, and then sell them to other banks.

The argument against the Democrats that I hear is that Freddie and Fannie pushed the sub-prime loans on banks and, were it not for that policy and the subsequent collapse of Frannie and Freddie, there would be no crisis.

My question is: What possible incentive would there be for large banks to take on high volumes of sub-prime loans? What possible benefits could they gain from carrying a lot of this type of paper? How is greed a factor here?

Any economists out there?

[TruthWillWin]

One 1000 percent wrong, up until this time banks were not allowed to co mingle their funds in stocks and bonds. Banks were banks, not investment stock brokers and stock clearing houses nor were they mortgage brokers. And this needs to be reversed, banks should be banks, and that is all.

How did allowing banks to handle other product, insurance for example, help create subprime loans?

Banks were not mortgage brokers prior to deregulation? Seems I financed a home or two with a bank long before 1999? Actually deregulation allowed some banks that held subprime loans to diversify with more products and may prevent them from going under.

[org.whodat]

Actually deregulation allowed some banks that held subprime loans to diversify with more products and may prevent them from going under.

ROFLOL,then they don't need my money!

[org.whodat]

Seems I financed a home or two with a bank long before 1999?

Just as a point, I never said they did not lend money on homes. Actually I have bought several homes on ninety day note's.