Saturday, March 17, 2007

Sub-prime Loans and the Failure of Credit Welfare
"The idea of making credit card (unsecured) and mortgage (secured) loans available to anyone with bad credit or no credit record in amounts greater than any reasonable, historical measure of credit-worthiness justifies in order to "help" them is a fraud."

I have to admit, with all the gyrations in financial markets and housing I don’t know where to begin these days. I spend most of my time reading news and blogs just to keep up.

I read on itulip yesterday that Greenspan is now spewing contradictory statements to things he said when he was Fed Chairman. The question is: why did we believe him in the first place?
O.K., I don’t find it so shocking. A man has to be a little self interested to achieve the kind of power and position Greenspan attained.

The problem however as I see it is, as money became cheap and easy to get, most of us became just as self interested and in many cases down right greedy. As I look around, I see a culture of corruption dominating society. This is not something that will go away if we close or eyes and wish.

Most of us played a part in the current state of the economy, whether we didn’t take the time to understand the loans we were getting into or we were profiting on a rising housing market. There is plenty of blame and denial to go around.

One thing that can’t be denied though: the level of outright corruption in the mortgage industry. I’ve read stories of how people were cheated by predatory mortgage brokers and in some cases it nearly defies belief. Even worse, it illustrates a level of moral decay that is just a little frightening.

The bottom line is however, when the dust settles, who will be left to sweep up?


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