No. And they didn't even have to report suspected fraud like banks do. And it wasn't just in the USA either. The problem with over-leveraging and poor systemic rick management affected many countries, and it evolved in an unregulated markets for complex financial instruments. And we have to address global macro economic imbalances to fully understand how so much capital investment was so desperately seeking seemingly risk-free higher returns would have parked itself in those assets in the first place. Unfortunately, you'd be better off taking this to a forum on an economics web site if you hoped to get any meaningful responses. To be perfectly honest about the character and quality of responses to economic questions in this forum, they are ill informed at best, and cynically deceptive at worst. The Democratic-left are only marginally more on track than the Republican base. At least they seem to recognize that derivatives and the innovation of financial instruments in unregulated markets played a central role. Both ends of the US political spectrum seem to almost entirely skip the issue of global imbalances. I was pleased to see that Paul Krugman recently addressed an aspect of this problem in a recent blog post regarding dollar valuation. The Republican base, on the other hand, has had to create implausible scapegoats, and nobody in any central bank or any thoughtful policy analysis going on anywhere on the planet takes their ill informed mutterings (read as propaganda) seriously.
Its no longer each and all the government's fault. yet we could desire to continually no longer exempt them from any style of blame the two. the government did create a industry for this, in the direction of the community Reinvestment Act (CRA), which positioned tension on banks to mortgage to those who does not usually have the means to acquire a lonan. The banks have been able to kit those loans and sell them off to different economic establishments and made huge earnings. The reason isn't so easy because it appears that evidently on the exterior, and the banks and government are the two at fault.
The primary failure was the federal governments, but the CRA was the least of the causes, but it was a cause. Barney Frank and his support for Freddie Mac and Fannie Mae and forcing lenders into the feds arms was a major cause of the collapse.
The "worst offenders" on the sub-prime mortgage debacle were the politicians who wrote and passed the legislation requiring mortgages be granted to people who couldn't afford them and the idiots who asked for these mortgages. The mortgage companies were simply obeying the law and trying make a profit - their purpose for existing in the first place. ALL mortgage lenders are subjected to federal interference.
Congress has a finance committee that is responsible to oversee Freddie Mac and Fannie Mae. In my view they hold the most responsibility. Congress encouraged Freddie Mac and Fannie Mae to buy these bad loans which put the US Taxpayers at risk for paying the loans when people walked away from their responsibility to pay them. I hope American will vote out every sitting congressman and senator to send a message to politicians who appropriate tax payer money to stop abusing their power and influence.
The idea of bundling subprime mortgages for profit was co-invented by Obama's campaign finance manager, Penny Pritzker. "When it began, 'subprime lending' wasn’t a term in common usage, let alone understood outside financial circles. One of its late 1990s originators was Obama campaign finance chairperson Penny Pritzker when she served on the Board of the failed family-owned Hinsdale, Alaska Superior Bank." Check it out:
I still say the worst offenders were those that defaulted on their loans. Whomever pushed for the CRA knew damn well this would happen one day.
Everyone from the top down.
THE BLAME LIES MAINLY WITH FREDDIE MAC & FANNIE MAE
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................................what reena says...............