Pat Buchanan Promotes 9/11 'Truth'

harpsicon9/15/2009 7:40:30 pm PDT

re: #264 iceweasel

The mortgage crisis owed more to the selling of bundled mortgage securities than individuals defaulting on mortgages.

Buchanan’s a lot more than a nasty old windbag, I’m afraid.

Actually, no.

The mortgages only existed in the first place because Fan/Fred would automatically buy them up if they passed some pretty basic requirements. And of course the mortgage lenders were encouraged by the CRA to break all their old standards for giving loans.

But hey, why worry, when whatever you can get to pass muster makes the govt pleased, and you can just sell it and make some easy profit. Everybody’s happy!

The people who think up all these social programs never seem to consider that a whole lot of people will do what’s good for themselves without considering the global intent of social do-gooders — revealing one of the inherent weaknesses in all these kinds of programs.

In short, the trading of bundled mortgages was not a bad thing at all, except that all kinds of really awful loans facilitated by CRA and Fan/Fred were in the bundles. Had they not been in the bundles, there’s no problem. They should probably have been rated lower, but with the apparent backing of the federal govt, they looked just fine on the surface. Any rating agency that had aggressively questioned them would probably have been dragged in front of congress by Barney Frank, who was defending all this nonsense as late as the summer of 2008.

The underlying problem was the legal facilitation of bad loans. Without that, no bad bundles, no bad paper, etc.