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My wife works in the corporate mortgage department of a fairly large US bank and she told me how many of her fellow employees cheered on this news a few months
by gehwartzen 8y ago
My wife works in the corporate mortgage department of a fairly large US bank and she told me how many of her fellow employees cheered on this news a few months ago when it became clear regulations would be rolled back. Then a month ago about half of those same people lost they're jobs; turns out spending extra resources checking the accuracy of loans and applicant financials is not something banks do if they don't have to.
The other interesting tidbit I learned form her is that the bare minimal paperwork processing that will still get done is actively being outsourced to India. Just a reminder that one of the large problems to come out of the last financial crisis was that banks couldn't even tell who owned the actual morgages or provide the actual signed loan documents to many borrowers.
If (or rather when) we have the next mortgage crisis it's going to be an absolute mess.
- nervousvarun 8y agoSo basically when that invariably happens (next mortgage crisis) we can expect more of the same...public losses, privatized profits.
- ktsmith 8y agoThe more immediate crisis will probably be due to other types of consumer debt. Take a look at auto lending and bundling as an example.
- klipt 8y agoFrom what I read this is predatory but in a different way - auto lenders want buyers to default, then they repossess the car while keeping the previous payments - basically like leasing out the car but higher profits.
- fallingfrog 8y agoNot to mention the mountains of leveraged buybacks and leveraged buyouts. In my industry all the big players are bidding prices that can't possibly turn a profit for assets which they evidently hope to flip later. I think that kind of behavior is endemic at this point. So I think it's going to wind up being a corporate debt bubble.