The Mortgage Crisis and Who Is To Responsible

The Mortgage Loan Crisis: Who Should Take The Blame

The only time mortgage confusion was higher that it is right now is back when sub-prime mortgages were not known to be the cesspool that we now know them to be. The global economic system has been collapsed by people who were confused about mortgages and didn’t know it. Whose fault was it? It was the fault of the sub-prime home buyer. It was the fault of the sub-prime mortgage broker. It was the fault of lazy financial advisors who put their client’s money in asset backed paper that turned out to be worth whatever recycled paper goes for and no more. Of these, the most dangerous and most responsible party, the Federal Reserve Bank, is also the malefactor fingered the least.

The Federal Reserve increased the amount a bank could loan relative to the amount the bank holds in deposits. It is hard to argue that the increase to a 30-1 ratio was simple idiocy. Did you see Jon Stewart hammer Jim Cramer, the host of CNBC’s Mad Money, on who did this? Well, the answer is, the Federal Reserve Bank did it. Congress must replace the FRB.

Mortgage brokers tried selling a subprime mortgage to any prospect that had a pulse. Millions who trusted their financial advisors had no idea there money was getting tied up in mortgages to unqualified people.

These shaky mortgages were then bundled and sold to financial firms as ‘asset backed paper,’ the now infamous ‘toxic assets’ we, the taxpayer, are buying from the banks. An other word for a so called toxic asses is a liability. And that’s what the governement is buying. The American government is using taxpayer money to buy liabilities. Read more on this in geld lenen binnen 1 dag in Dutch.

Finally, the people who sit and tell CNN cameras that they didn’t know that they had an adjustable rate mortgage are simply too stupid to own a home. I know that’s harsh, but it is the truth. Does that sound pessimistic? Good, because if you are not pessimistic now, you are a fool.

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