Quote:
Originally Posted by spence
Yes, they were.
Easy, they were "gaining" the high fees charged to process the loan to a sub-prime borrower.
A key factor in this mess was the process by which a loan was given, then sold to a third party. The liability on this loan was often then off-loaded to yet another third party.
And here you have different markets. One focused on making money from the initial loan transaction, and the other focused on profit from a variety of derivitave loan products.
The system evolved to a point where it was very profitable (with little to no risk to the loan originator) to extend credit to an unworthy borrower.
-spence
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So, in the end, who is the loser in this process? If the borrower can't make payments, he defaults, doesn't "lose" the home cause the "bank" (or the final holder of the lien) owns it. Is it some "third party" who now owns the home the loser? Who is the "predator" and who is the victim?