Comments on: A Brief Explanation of This Sub-Prime Crisis http://www.bloggernews.net/114565 High-quality English language analysis and editorial writing on the news. Mon, 09 Nov 2009 01:47:29 +0000 http://wordpress.org/?v=2.3.3 By: The Dude http://www.bloggernews.net/114565#comment-1400203 The Dude Tue, 01 Sep 2009 16:25:11 +0000 http://www.bloggernews.net/114565#comment-1400203 Let's not forget that no one told the banks what terms they should impose in meeting the requirements of the CRA. The banks intentionally imposed terms that would require borrowers to refinance over and over - until refinancing was no longer possible because the equity was no longer there. Sadly, the same areas in which banks previously refused to lend were the areas most targeted by crazy subprime loans. Redlining never went away, it only changed form. Let’s not forget that no one told the banks what terms they should impose in meeting the requirements of the CRA. The banks intentionally imposed terms that would require borrowers to refinance over and over - until refinancing was no longer possible because the equity was no longer there.

Sadly, the same areas in which banks previously refused to lend were the areas most targeted by crazy subprime loans. Redlining never went away, it only changed form.

]]> By: Isaac Gradman http://www.bloggernews.net/114565#comment-1337707 Isaac Gradman Fri, 10 Jul 2009 19:40:28 +0000 http://www.bloggernews.net/114565#comment-1337707 Make no mistake about it, the banks were not innocents trapped in a "Catch-22" foisted upon them by the Government. Certainly, goverment incentives to artificially inflate home ownership contributed mightily to the current financial crisis. But banks profitted handsomely during the explosion in lending by creating a huge volume of loans and then selling these loans off almost immediately to Wall St. investment banks, who turned around and sold securities based on these loans to investors. Banks also fueled this overheated credit market by using these securitizations to take on more and more leverage, in attempts to generate even greater profits. Many got burned when the market for these securities disappeared overnight, and they were left with inadequate reserves to support their outstanding loans. But not before bank executives walked away with millions from all of the fat years. You can read more about the causes of the financial crisis at http://subprimeshakeout.blogspot.com/search/label/causes%20of%20the%20crisis Make no mistake about it, the banks were not innocents trapped in a “Catch-22″ foisted upon them by the Government. Certainly, goverment incentives to artificially inflate home ownership contributed mightily to the current financial crisis. But banks profitted handsomely during the explosion in lending by creating a huge volume of loans and then selling these loans off almost immediately to Wall St. investment banks, who turned around and sold securities based on these loans to investors. Banks also fueled this overheated credit market by using these securitizations to take on more and more leverage, in attempts to generate even greater profits. Many got burned when the market for these securities disappeared overnight, and they were left with inadequate reserves to support their outstanding loans. But not before bank executives walked away with millions from all of the fat years.
You can read more about the causes of the financial crisis at http://subprimeshakeout.blogspot.com/search/label/causes%20of%20the%20crisis

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