BENWEEWEE (finance content)

[MakoMike]

Originally Posted by Swimmer

Makomike, its the large scale problem created by the home loan originators and the borrowers who both worked to create unverifiable nonexistent income, that created this mess. I don't see how reining in those originators and the companies they work for as the F.B.I. is starting to do will hurt. It is theft on a grand scale. It is going to shut down the economy all by itself without any help from anyone else. Just watch. This isn't much different from the house flipping scandals of a decade or more ago. That partailly collapsed the real estate market for about a year when that occurred. More greed and outright theft. The originator gets his, the real estate broker gets his, the attorneys get thiers, the originators company gets thiers, and the loan buyer gets left holding the bag. Not this time though. This time its us!

You said "No one shold be allowed to sell off loans anymore." That would totally shut down the credit markets, which in turn would totally shut down the economy. It would affect both big and small businesses, big companies couldn't float bonds or commercial paper, small companies couldn't get loans from the SBA or their local banks becuse those insitutions could borrow funds. The housing market would dry up in a POOF, when Fannie Mae couldn't raise funds, kids would be thrown out of school when Sallie-mae couldn't get funds for student loans. IN short most economic sctivity would come to a grinding halt.

[Swimmer]

Let me refine my answer just a bit, home loan mortgage originators should be reined in, not commercial business loan companies. Commercial lending from banks to businesses has little or maybe nothing at all to do with the current sub-prime fiasco. Other than one is lending money to the other to cover the bad debt incurred by originators, who work for companies like Country Wide that obviously never bothered to check what thier employees were doing. All Country Wide did was count the money they earned after selling the mortages they issued to unqualified people. The sub-prime mortgage fiasco was what I was referring too. No one anywhere has said bank to business loans, the SBA, sallie mae, which sucks by the way since it outsourced its servicing to India, or any commercial lending started or had anything to do with the current crisis.