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not created by the market. banks took these high risk loans knowing they could sell them to fannie-mae and freddie-mac, who in turn knew they would not be allo
by nazgulnarsil 18y ago
not created by the market. banks took these high risk loans knowing they could sell them to fannie-mae and freddie-mac, who in turn knew they would not be allowed to fail.
- DanielBMarkham 18y agoActually, weren't lending institutions required to loan so much to high-risk borrowers as a way to make sure more people had homes? Seems like I heard this was a requirement if the institution wanted to open new offices.
- mattmaroon 18y agoThe loans themselves are only a tiny fraction of the problem. It's more the credit default swaps and other forms of gambling tied to the loans.