Average Credit Cards with Great Rates

What caused the mortgage crisis? If you ask most consumers they will say, “Greedy mortgage brokers that made bad loans to good people”. Perhaps they did play a part in the chain of destruction that America is in today, but they were only one link in a very long chain. The truth is, the mortgage crisis was facilitated by consumer demand, ignorant politicians, spineless banks, and yes, the small brokers and lenders.  All of these institutions lacked the “moxy“ to stick to sound underwriting principles in the face of tough competition spurred by escalating property values and a good economy.

I give you the anatomy of a mortgage.  There used to be three types of mortgages: Government (FHA); Conforming (Fannie Mae and Freddie Mac); and private subprime lenders, which were mainly owned and funded by the larger banks, operating under a different a name. Each one of these lenders established guidelines that outlined the terms in which they would “buy” the loan from the small brokers after the loan closed. Every program had a different set of guidelines that catered to a different segment of the market. That market included people with good or bad credit, and consumers that could or could not prove their income.

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