Summary
Americans have become used to a regime of easy credit conditions, which are eased still further when danger threatens. And with so much easy money sloshing around, a number of people develop sticky fingers. The scheme was hatched simply because money conditions were so loose that everyone was trying to increase his loan book. Sticky-fingered individuals thought that it would be only right that the lenders should reach out to those who had no jobs, no income, no prospects, and even a history of bankruptcy. It is quite clear that these people were not fly lenders who were not being over fussy about punting out a loan, they were assisting fraudsters who were intending to enrich themselves by fleecing improvident lenders. It must have been an open secret that subprime mortgages were being taken out by fraudsters, but it seems to have been ignored.
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Extract
The Subprime Mortgage Disaster
Ye have plowed wickedness, ye have reaped iniquity. This remark of the prophet Hosea needs to be dusted off ever more frequently as the business world rockets from boom to bust, assisted by a heavy dose of fraud. In the 1980s Americans were going to jail for insider trading, ramping junk bonds, and scamming the savings & loans institutions. In the 1990s Americans were committing the mega-bi...
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