Those people...NINJAs, shouldn't have gotten the loan...period. They shouldn't have been offered ANY loan.
But the BANKS, used their well placed "politicians" to get loans for all those people...the politicians mandated that a certain percentage MUST get a loan. That percentage of additional loans are all additional profit for the banks that they otherwise wouldn't have gotten because the borrower would have been turned away.
The banks make their "front end" origination fees (profit), and then pawn off the "worthless", yet AAA rated, mortgages to some greater fool to be stuck with a non-performing loan. They'll keep the good loans because the interest is "free money" for them. Look up fractional reserve banking for an eye opener.
Greedy banks had the standards lowered so people COULD get extravagant loans, which they couldn't pay off. But the banks had already made their profit from origination fees. The banks put the people in office who then write the laws the banks want.
Banks want EVERYONE to take out a loan! Especially a loan that's guaranteed by the government...they CAN'T lose!
Sure, you need "greedy" people who think they're getting something for nothing to make it work. But the real greed was started by the banks.
|