Comments on: The Real Cause of The Subprime Mess. http://moneysocket.com/the-real-cause-of-the-subprime-mess/ Building wealth while enjoying life Thu, 20 Nov 2008 08:44:56 +0000 http://wordpress.org/?v=2.6 By: Danny Tsang http://moneysocket.com/the-real-cause-of-the-subprime-mess/#comment-5201 Danny Tsang Tue, 08 Apr 2008 04:41:08 +0000 http://www.moneysocket.com/the-real-cause-of-the-subprime-mess/#comment-5201 Hi Mike, thanks for your comment. I can't say I agree with your argument that the government is the root cause. They did not require banks to loan money to unqualified people, I can't begin to imagine how they would sell that idea to banks. The banks themselves took the risks for higher interest rates and on the belief that they are making loans backed by appreciating assets. They were greedy. At best, the government turned a blind eye so I think the cause is greed. Even if the government did initiate the lending of subprime mortgages, the problem was compounded by all the greedy parties I mentioned above. Either way, lesson learned. My point is that these parties should think twice before getting greedy because, as you mentioned, greed was always present and will continue to be around. Hi Mike, thanks for your comment. I can’t say I agree with your argument that the government is the root cause. They did not require banks to loan money to unqualified people, I can’t begin to imagine how they would sell that idea to banks. The banks themselves took the risks for higher interest rates and on the belief that they are making loans backed by appreciating assets. They were greedy. At best, the government turned a blind eye so I think the cause is greed. Even if the government did initiate the lending of subprime mortgages, the problem was compounded by all the greedy parties I mentioned above.

Either way, lesson learned. My point is that these parties should think twice before getting greedy because, as you mentioned, greed was always present and will continue to be around.

]]> By: Mike McConnell http://moneysocket.com/the-real-cause-of-the-subprime-mess/#comment-5197 Mike McConnell Tue, 08 Apr 2008 00:47:04 +0000 http://www.moneysocket.com/the-real-cause-of-the-subprime-mess/#comment-5197 Greed was an issue but you do not appear to be aware that the Government began requiring Institutions to loan money to people that were not qualified before. Greed was present before that but was not problematic. Perhaps the government is the root cause. Mike Greed was an issue but you do not appear to be aware that the Government began requiring Institutions to loan money to people that were not qualified before. Greed was present before that but was not problematic. Perhaps the government is the root cause.

Mike

]]> By: Danny Tsang http://moneysocket.com/the-real-cause-of-the-subprime-mess/#comment-1611 Danny Tsang Sun, 20 Jan 2008 04:39:23 +0000 http://www.moneysocket.com/the-real-cause-of-the-subprime-mess/#comment-1611 Hi Ian, Thanks for your comment. All I am saying is that the root cause of this mess is greed and we should thereby learn from it. Of course the actual causes are very complex and detailed and depends on the actions of the individual lenders, borrowers, appraisers and everyone else in a real estate transaction. However, the root cause is greed. Like you mentioned, all the parties I named were just as greedy before and that is exactly why the lenders came up with these clever loans, to feed their greed. Same with the brokers who wanted to get a commission so they pushed these loans to anyone with a pulse. Even the buyers/sellers got greedy like I explained so they embraced these loan programs. If you're going to tell me that the root cause of the problem is not greed, I kindly ask you to explain further because I don't see any other reason for the type of behavior we've seen in the years prior to the subprime mess. Pure greed and nothing more. Thanks again for your comment. Please feel free to reply if you believe I am wrong. Hi Ian,

Thanks for your comment. All I am saying is that the root cause of this mess is greed and we should thereby learn from it. Of course the actual causes are very complex and detailed and depends on the actions of the individual lenders, borrowers, appraisers and everyone else in a real estate transaction. However, the root cause is greed. Like you mentioned, all the parties I named were just as greedy before and that is exactly why the lenders came up with these clever loans, to feed their greed. Same with the brokers who wanted to get a commission so they pushed these loans to anyone with a pulse. Even the buyers/sellers got greedy like I explained so they embraced these loan programs.

If you’re going to tell me that the root cause of the problem is not greed, I kindly ask you to explain further because I don’t see any other reason for the type of behavior we’ve seen in the years prior to the subprime mess. Pure greed and nothing more.

Thanks again for your comment. Please feel free to reply if you believe I am wrong.

]]> By: Ian Thomas http://moneysocket.com/the-real-cause-of-the-subprime-mess/#comment-1609 Ian Thomas Sun, 20 Jan 2008 03:24:41 +0000 http://www.moneysocket.com/the-real-cause-of-the-subprime-mess/#comment-1609 Your argument that greed was the primary cause of the subprime crisis is fallacious. All the parties you mention as being too greedy were already just as greedy before the subprime boom and will continue to be in the future. The actual causes of the crisis are far more complex. Your argument that greed was the primary cause of the subprime crisis is fallacious. All the parties you mention as being too greedy were already just as greedy before the subprime boom and will continue to be in the future. The actual causes of the crisis are far more complex.

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