Except the mortgage hawks acting as financial advisors drew in unsuspecting people (just like real financial advisors sometimes do with millionnaires who aren't experts) by promising that even if a person would struggle making the initial mortgage payment, with housing at an all-time high, they could easily refinance in a few months. A lot of people fell for their shtick. Was that stupidity? Yes, and the hawks knew that. They preyed on those very people who wouldn't understand.
You have got to be joking. There are no ‘mortgage hawks’ out there scooping up unsuspecting victims. You were not simply walking down the damn street one day and BAM, a corner mortgage guy catches you with his sales pitch. In order to get to that point you had to go LOOKING for a house. When I purchased my house I calculated what I could spend and looked at houses on that category. What people were doing was playing a dangerous gambling game where they wanted to refinance over and over again without ever making a principle payment. They knew exactly what they were doing and if they did not then they deserved whatever hardships came their way as a result. Unfortunately, now everyone that did the right thing is now suffering because the fallout causes a domino effect throughout the entire economy. What the lenders were doing was following the governments plan and offloading their bad mortgages to Fanny and Freddy. Had those entities NOT purchased every dam crap loan that was thrown at them in behest of the government there would not have been a housing crisis. The home loan market does not need to be ‘set up’ like anything. What it needs is to take the risk that they are getting into rather than selling it off to a third party, particularly to a party as closely connected with the government as the 2 big ones were or to an entity that large in the first place.
that cash not causing any real impact other than screwing with the economy even more.
I suggest you download the documentary "House of Cards" to hear it
directly from some of the store-front mortgagors themselves telling how they roped people in. Fannie & Freddie didn't even get into the subprime mortgage business until after 2005. Prior to then, nearly all sub-prime loans were bought by Wall Street. In fact, F&F were not
permitted to purchase non-conforming mortgages
until they changed their own rules to start buying these non-conforming subprimes, in order to maintain market share and compete with Wall Street for profits.
