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Mortgages are pretty old as a product, banks know who is likely to afford it and who isn't. Doesn't the sub-prime crisis basically blow that theory out of the
by matthewmacleod 8y ago
Mortgages are pretty old as a product, banks know who is likely to afford it and who isn't.
Doesn't the sub-prime crisis basically blow that theory out of the water?
- giarc 8y agoMortgage lenders likely knew these people couldn't pay it back, that's why they sold the debt as fast as they could.
- patio11 8y agoIf this were true, you’d expect America’s largest banks to have had only 60 days or so of subprime mortgages on the books, which would have meant minimal exposure in the scheme of things. In the world we live in, Bank of America fell by 95% or so, Citibank missed nationalization by a whisker, Wachovia was forced to merge, etc etc, and that’s not even counting the investment banks, because they were happily engaged in the traditional business of banking in addition to securitization.
- onetimemanytime 8y agoNope, the sub-prime lenders deviated from the norm