The more I read, the more I learn. I’m reading The End of Wall Street by Roger Lowenstein. Actually, I’m listening to the MP3 version from the library. I’m only at Chapter 5 or 6 and already I am so disgusted by what I am hearing.
Did you know that Banks and lending institutions had been slowly lowering their standards over the last twenty years? And, that the government played a big role in the idea that everyone should be a homeowner?
Did you know that there were loans where the people didn’t have to provide proof of income? Oh, you make $150,000 a year? Great, let’s sell you a $500,000 home. No downpayment? No problem – we’ll just write you two loans: one for 80% of the value and one for 20%.
Some of the blame of what happened should fall on the homeowners. They lied on their applications. They signed on the bottom line that, yep, they could make that $1200 house payment.
A little part of me feels sorry for them. They were hoodwinked. They dreamed of owning a home and someone said, we can make it happen. They believed the fantasy. Can you blame them? This entire nation was built on the backs of dreamers. People looked west and said, “Hey, what’s over there?” And, they went and found it.
But, I digress.
A lot of the blame needs to fall on the shoulders of the people who only saw the short-term profits and didn’t look down the road. Everyone was partying right up until someone decided we should pay the check. The lack of regulation and oversight on the part of the government, the easing of the credit lines because Alan Greenspan kept lowering the interest rate and the greed of the people writing the mortgages and those who were buying them up in a neverending cycle of looking for profits – all of that contributed to the financial collapse.
I’ll post more information – and a review – after I’m done with The End of Wall Street. But, I just wanted to pass this little tidbit of information. It’s really a reminder to everyone who seems to think that everything is going to be fine overnight. We didn’t get into this mess overnight – we’re not going to get out of it overnight.