Reading comprehension problems?<quoted text>
Most of those loans were not FM's but private mortgage companies offering loans to anyone who would take one for high interest because they didn't have to worry about getting it back. They bundled those risky loans and resold them with ratings undeserved by the content of the bundle. They did cold calls offering equity lines of credit and 2nd mortgages. As the foreclosures started in this subprime group it snowballed, of course, and the artificially created housing bubble popped and even people who had standard loans owed more on their homes than they were worth which eventually impacted every region of the country, mortgage lenders and investors, and the FM's too, of course. The power of the banks is really what caused this. They were able to get Gramm-Leach-Bliley passed and then it was inevitable. That they got the lowest tax rates in recent history for this stolen money is just the icing on the cake.
You people twist yourselves into pretzels in order to blame your favorite scap goat.
It is really simple... The government and community activist groups (ACORN) pressured banks to make loans to minorities ... and not just offer loans, they had to be on the books of the banks. In order to do that standards were lowered,... and part of that was subprime loans because they offered the lowest rates ...(subprime ... understand the meaning of subprime?)
All was hunkydory as long as housing prices climbed, and the borrowers quickly built equity (understand the meaning of equity?)
The problem came when interest rates rose slightly, and the housing boom topped out ... And now you have people who own houses with little or no down payment invested (many were speculators) who have houses with negative equity (worth less than what they bought it for)... and that made it easy to just walk away.
ALL CAUSED BY THE DESIRE TO MAKE HOME LOANS AVAILABLE TO POOR NEIGHBORHOOODS AND MINORITIES!
It is really not so hard to understand ... if your first premise is not "it's Bush's fault"