It runs a bit deeper than this. The Democrats forced sub-prime on the banks and savings and loans, all true. But once these lenders found out how much money they could make writing sub-prime paper, they went crazy with it. I owned a mortgage company from 1990-2004. I saw what certain lenders were doing. They were underwriting toilet paper.
Example: A guy had the following credit report. 11 collection accounts, and one current account, with a high of 500 dollars. He put 100,000 down and got an 800,000 first mortgage. The same company opened up a division in Chatsworth, CA. The sole reason for this office was to write sub-prime mortgages for illegal immigrants. Another major bank did the same. Many other banks were writing sub-primes for 500,000+ with NO down payment. NO income verification.
Loan officers were charging 3 points on a $600,000 loan. Some were making $100,000 a month. I could name companies, their names, and their corporate positions in a dozen of these lenders.(I only wrote “A” paper. Never touched this stuff)
In the summer of 2006, I tried to warn California FReepers that there would be a TRILLION dollar bloodbath, and to quit trying to flip houses, because they would get caught in the crash. I was flamed : )
Let me ask you this. If you haven’t been taken to court and forced to do this, and yet you have seen other banks or lending institutions taken to court, are you necessarily an evil player if you pursue business according to the court’s demand in other jurisdictions?
To you and I, yes. But by the letter of the law, these were not evil players. According to the law they simply played the game the courts demanded ‘some companies’ play.
While I respect you for not participating in this sort of business, how can I trash a company that did when the courts ruled against companies that refused to?
I could say it was evil, and be right as could be. None the less, this is what the courts had deemed ‘must comply’.
In essence, you were lucky not to have been taken to court and forced to have to give out some of these loans.
Isn’t that true?