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IronLionZion

(51,116 posts)

6. It was all of the above

Reply to mfcorey1 (Original post)

Wed Sep 6, 2017, 07:56 AM

Sep 2017

Mortgage originators know if their client is flipping houses, but they got greedy since they benefit from it. They could deny someone for having too many mortgages too quickly, but they didn't.

Financial firms know what they are packaging into securities, but they got greedy since they are selling it to someone else.

Flipping is definitely a big part of it, but there are many more who enabled and encouraged the problem. For many years leading up to 2007, there were articles calling out the housing bubble. Very few predicted how it would bring down our financial system due to how it was connected to securities.

This book and movie is very enlightening:
https://en.wikipedia.org/wiki/The_Big_Short

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Highlight:

House flippers triggered the US housing market crash, not poor subprime borrowers [View all] mfcorey1 Sep 2017 OP

THIS is what I always thought! flygal Sep 2017 #1

Stream The Big Short Not Ruth Sep 2017 #2

Making money available for loans... Weekend Warrior Sep 2017 #3

I'd argue that the biggest problem.... Adrahil Sep 2017 #16

That is a huge part of what I'm talking about. Weekend Warrior Sep 2017 #17

People were buying multiple houses in new subdivisions Maggiemayhem Sep 2017 #4

I was a real estate appraiser in that era. Interesting, but arguing what "triggered" Hortensis Sep 2017 #5

I would agree....somewhat.... roomtomove Sep 2017 #9

Yes. Don't see the "somewhat." The financial industry drove this, assisted Hortensis Sep 2017 #10

It was all of the above IronLionZion Sep 2017 #6

I tried to tell people this when it was happening. Poor people will eat dirt to pay their mortgage haveahart Sep 2017 #7

Poor people can't afford to lose their home and don't have other options IronLionZion Sep 2017 #13

aka Speculators bucolic_frolic Sep 2017 #8

When I was traveling up and down the Gulf Coast after the BP oil spill in 2010 Dustlawyer Sep 2017 #11

Those waterfront properties might get destroyed by the hurricanes IronLionZion Sep 2017 #14

In 2003, I worked for an attorney whose cousin was one of his main clients. no_hypocrisy Sep 2017 #12

I think this is an oversimplification at best genxlib Sep 2017 #15

This is utter rubbish. Somebody needs to read "The Big Short" longship Sep 2017 #18