Right, and don't take the free candy from the bowl with the sign on it that says "free candy".
If 100 people were told that by just signing a piece of paper you could buy a home 100 people will sign the paper every time.
The historical default averages would undoubtedly rise as (guessing here) 50% of those 100 would have been precluded from buying a home in any previous time that utilized normal requirements for a loan.
Of the remaining 50% you would likely see normal default averages.
The reason these requirements were made lax was due to greed. By making bundled mortgages something that could be securitized, packaged, and sold to investors this added gas to an already well lit fire. Banks could quickly prepare then sell more mortgages than ever and still remain capitalized to write more mortgages. These were traded like a hot potato to F and F. Since the bad paper was hidden amidst the good the problems with the bad paper were not discovered until they had already been sold as securities worldwide. Thus a pandemic of bad mortgages spread around the world.
Prior to the alteration of law that allowed this F and F had maintained a higher yield and a lower loss rate than any of its competition for the entire history since their inception.
F and F were are remain the unwitting scapegoat for the greed, arrogance, and stupidity of those entrusted by the people to make sound judgements for the good of us all.
But since just 30% of the legal voters in this country vote, and 80% of them do it blindly with almost no real forethought, this is exactly the type of career scumbag that we put into office ver and over again.
If a teacher at your kids school dressed like a slut in low cut tops and a mini skirt yet was an awesome teacher, that women would still get rail roaded straight out of the school by every mother in the class.
Yet when your congress: send your kids to die in a war for corporate greed you do nothing, approves billions in military spending and cuts education budget you do nothing, approves an illegal mandatory health care system you do nothing, kills all alternative energy measures in favor of big oil you do nothing, takes away freedom with the Homeland Security Act you do nothing, ad nausea!
Btw when the hookers show up to the politician's hotel room dressed like a slut in low cut tops and high skirts....you do nothing!
Ironic?
$FNMA
