On 2011-06-14 1:50 AM, Nathan Loofbourrow wrote:
After a while you run out of big dumb mortgages, and we did. So the pressure
was on to create more of them. Once everyone has a mortgage, or maybe two,
you start lending to folks with a risk profile that wasn't so hot anymore.

This happened in commercial real estate, which also got bubbled, and also got falling credit standards - yet no crisis in commercial real estate. Developers went bust, and financiers forclosed, sold the properties for markedly less than loan value. And that was that. No crisis, no drama, no bailouts.

The difference was that with mortgages to individuals, (usually black or no hablo English individuals) the bank issued liar loans, or like Beverly Hills bank, got rated "Substantially non compliant with the CRA"
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