Reply #1: This is recycled bullshit. it all goes back to the crap banks were doing

[No Elephants]

to get a huge bunch of mortgages, so they could buncle them and sell them to Wall Street, which then sold them as mortgage-backed securities in the U.S. and abroad. In the process, they drove up home prices, leading to the real estate bubble. They are the reason so many homeowners are so far underwater. So, right off the bat, cry me a river.

lenders are usually far the more sophisticated parties in the transaction, as to both finance and law. Lenders are almost 100% of the time the ones with the bargaining leverage and also they (or their lawyers) are the ones who drafted the loan documents. So, if there is something wrong from the transaction from their perspective, they have no one but themselves and their lawyers to blame. So, cry me another river.

Moreover, people are not walking away from loans because most states now have recourse mortgages. That means that, even if people walk away from real estate on which there are one or more mortgages, the lenders can sue them for the balance. And all other kinds of loans are also with recourse. And no taxpayers bailed them out or will bail them out, either.

So lenders can sue the borrower, which is the deal the lenders made. If the buyer is too broke to make a lawsuit worthwhile, whose fault is that? The lender is the one who decides who he, she or it is going to lend to. They deliberately failed to qualify borrowers because they were making a fortune selling bundled mortgages to investment bankers.

Many borrowers are paying off huge mortgages at ridiculously above market rates because their homes are badly underwater and they can't refinance because lenders got stricter since 2008 and/or their income is lower than it was when they bought the homes. If anything, people are doing short sales, with the cooperation of the banks. And those are the lucky ones.

Besides, the American taxpayer paid for a lot of these loans with TARP. That is why they were written off.

This is a recyled version of the cynical claims made by liars in 2008 that the crash was caused by some electrician who bought a house he or she could not afford.

It's complex to rebut, but it's bullshit nonetheless. I did too many posts rebutting this kind of claim back around 2008-2009 to have any interest in repeating the identical drill just because some is dredging up the same issues.

If anyone wants to search DU for posts by no elephants that mention "crap mortgage derivatives" and/or "mortgage back securities," you will find not only my posts but those of other DUers discussing the subject.


Who causes this whole problem: Lobbyists, Congress, Greenspan and Bubba Clinton, each of which/whom had a lot to do with repeal of Glass Steagall, then mortage lenders and Wall Street (who probably hired the aforementioned lobbyists) who created a real estate bubble and crashed our economy and that of several other nations.

Anyone who says otherwise either doesn't have a clue or is being deceptive.

I know this is not written very clearly, but, as I said, I did the drill too many times before to spend more time on it four years later.

Sorry, formercia. I am not ranting at you, but at the bullshit claims being made. They just find a way to bring up the whole 2008 bs again, despite all the information out there on what really happened.