bigh0rt wrote:Late to the party, but just to chime in. I do feel people have to be held responsible for taking on these mortgages that they cannot afford, however, my brother being in the business, and being one of the people who was selling people these mortgages, I've seen first hand how some of it is done. These guys were making it sound like sweet deals (and they were, and the way the economy was, it was difficult to see what was on the horizon, looming. hindsight is 20/20). Now, that doesn't remove them of fault, but with what these brokers and such were pitching, it really did seem reasonable that these mortgages would be able to be paid off. Again, hindsight is 20/20, and it should be a long while, if ever, before something even remotely of this nature occurs again, but all I'm trying to say is I see why a lot of these people bought into these offers, which were more than affordable at the time, and didn't appear to be skyrocketing in the immediate future, the way they did, especially with the way they were being pitched to them.
But don't you have to at least put some of the blame on those people who actually made these loans? Afterall, they are in the business and should know whether someone will be able to afford the payments if/when the rates adjusted or the market stopped skyrocketing.
For a typical commercial deal that I work on, the loan officer, his boss, loan processor, underwriter, chief credit officer and the bank board typically have to approve/sign off on these deals.
Even for a small residential deal, you still have at least the loan officer, underwriter and whoever is authorized to approve the applicant's credit. Remember, these guys are in the business so they should know right?
What about the FDIC and regulators? How were they just overlooking these loans at the time? These lenders are constantly being audited so in a perfect world, they should be nailing these lenders for making bad loans.
In the end, it is everyone's fault but I still think the bulk of the blame rests on greedy lenders (afterall, if they don't make these loans then they don't make any money) and borrowers. Brokers were there to bring the two parties together. It was a perfect storm.
"Think of how stupid the average person is, and realize half of them are stupider than that." ~George Carlin