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Much like the housing collapse, banks have been mandated to finance to people that can't afford it for student loans. The blame doesn't solely lay with the bank
by hermitdev 10y ago
Much like the housing collapse, banks have been mandated to finance to people that can't afford it for student loans. The blame doesn't solely lay with the banks. The government is at least equally to blame.
- scarface74 10y agoThat banks were "mandated" to finance people who couldn't afford housing is nothing more than a conservative talking point. The risky loans that banks took on -- no doc loans, interest only loans, negative amortization loans, sub prime high interest loans -- were "non conforming". "Non conforming loans" by definition were not government backed loans. People who were taking advantage of those loans generally fell into a few categories. Investors who were buying real estate to flip. People who were getting houses appraised at more than they were worth and were illegally getting cash out and people with money that were buying over priced houses to live in but to sell later.