Wrong: It was the greedy lenders and greedy people that were enabled to buy these houses which they could not afford. True, no one put a gun to the head of the borrower to take out the loan, but, a good, honest lender would not, or should not make a loan that is bad for the loan company, which also is bad for the borrower. That is where the problem began.
rdiet, I agree with you. It was the CW's CEO and Management team who pushed the selling. Did you watch 60 Minutes? Their SVP of Fraud at CW then had found that fraud was systematic and they had to close 5 offices due to fake documents so that people can get the financing.
The loan company was turning around and selling the loans to Fannie Mae, who Barney Frank, and other Democrats, were arguing on behalf of - that the loans that Fannie Mae could buy should be more flexible and that Fannie was in perfectly fine condition.
Don't give me that crap.
Also, an honest borrower doesn't lie about his income so he can buy a bigger house. And someone making $50k doesn't take out a $300k interest only mortgage. Do the math.
This was a combination of greedy lenders and greedy borrowers.