The loan crisis, past and present
Re “FBI saw threat of loan crisis,” Aug. 25
This story made me laugh until I realized it was not a joke. It did not require the FBI or the CIA to see this financial disaster coming. Many who lived through one or more real estate ups-and-downs predicted this with crystal clarity.
Two problems were immediately apparent. First, there was the Catch-22 whereby any financial institution that refused to give loans on a low-down or no-down-payment, interest-only or undocumented-income basis would be accused of being opposed to letting first-time home buyers into this moneymaking game and opportunity to achieve the American dream.
Second, it was also evident that our leaders prefer to react after the mess hits the fan than act proactively. This way, they spend no risk or time trying to convince an entrenched populace of the benefit of their wisdom. Just let things spin out and then step in, with head held high and shoulders back, to gently help the injured.
Does anyone remember the national savings and loan debacle, when the financial industry got caught with its hands in the cookie jar and the feds bailed us all out? The FBI was not needed to see this disaster on the horizon, nor will it be required next time.
The reason the FBI and government regulators failed to preempt the mortgage loan crisis is that the politicians and regulators were attending fundraisers and accepting campaign checks from the mortgage lenders, bankers and Wall Street financiers.
When will the investigations of the politicians and regulators on the banking and financial oversight committees begin?