Subprime Mortgage Crisis

why does this sound like what the credit agencies were doing during the subprime crisis?

Isn't that rather similar to the subprime mortgage fiasco - everyone "knew" that there were stacks of mortgages that were worthless, but everyone continued regardless.

The crime was massive fraud by the credit rating agencies:https://en.wikipedia.org/wiki/Credit_rating_agencies_and_the...

No, he is simply an ignorant conservative hack. The boom and bust happened in the subprime loan market. Subprime loans are by definition those which are "sub-prime" (i.e. don't qualify for backing from Federal Agencies). This is why they were aggregated, sliced into parcels and sold on the market as CDOs rather than simply transferred to Fannie Mae.

Sure, I realise the fruit-picker example is extreme. But it was the sub-prime / alt-a mortgage market that imploded with default rates in some pools hitting 90%. But yes of course everyone jumped on the bandwagon across all of society - I'm not for a minute attempting to blame "poor" people for being financially irresponsible - far from it - I realise there was a complex interplay between the lenders/brokers/borrowers, the banks that securitised the pools and the people that bought the end produ

You’re forgetting that the fact that many ignored the law and their own banks policies, driven internally to give out more loans (to anyone, not just the poor), and then mislabeled the risk when repackaging and selling these to others.https://www.housingwire.com/articles/46335-wells-fargo-to-pa...I’d recomm

You don't remember the 99.999% being offered unjustifiable mortgages? That was a big part of the financial crisis.

mortgage backed securities werent the problemthe leverage for nonexistent (or overclaimed) mortgages wereleading to a crisis of confidence where credit dried up because banks didnt trust each othergot to watch for that. know the contents of your securities

The mortgages themselves weren't the problem - the problem was the way they were allowed to be bundled into mortgage backed securities, which created a firehose of investment money piling in from Wall Street to the mortgage market, which created bad incentives to issue more low quality mortgages (NINJA - no income, no job, no assets).

My experience has been this idea has largely been a myth pushed in conjunction with the community reinvestment act and the financial crisis, When. Looking at numbers, most of the subprime mortgages were originated by institutions not subject to the CRA and we had decades of banks complying with the CRA without giving out subprime loans. The financial crisis was largely a system repackaging loans they knew were bad and then claiming falsely they were good using voodoo math. And the CRA didn’t for