| Most recently submitted articles by by Robert Bell Provided by Amazines.com |
| Why Did We Have All Those Bailouts? |
| by Robert Bell |
| 06/03/2009 |
| It all starts in the housing market. Realtors peddle fantasies of unlimited wealth that leads to people wanting to overpay for houses. The desire for real estate at any cost provides an opportunity for lenders and mortgage brokers to make huge origination fees if they can lower standards and qualify more people. Appraisers use the comparative-sales approach which justifies current pricing based on the irrational behavior of buyers. Investors in mortgage backed securities enable the originations by purchasing any loan they can get. Default insurance companies like Freddie Mac, Fannie Mae and AIG provide false assurances to investors that they can insure their losses. Ratings companies provide dubious ratings that puts even more confidence into investor's decisions. All of this together leads to a massive inflation of house prices. People who overextended and overpaid for real estate cannot afford their payments. They are insolvent. This leads to defaults which leads to forced s |
| View more articles from Robert Bell |
Free Articles provided by Amazines.com - The ULTIMATE Article Database |
*** You are receiving this message because you chose to be notified of any new articles submitted by Robert Bell. To unsubscribe from this feature, please click here: Unsubscribe from Amazines.com. |
0 comments:
Post a Comment