Gross: Bush needs to rescue homeowners

[cobra de capell]

Originally Posted by bomelia

True, no arm twisting...but lots of sled greasing. Ultimately, the lenders in the sub-prime market bear an enormous amount of responsibility for creating products that sucked people in, people who could not afford the risk.

Mike

Mike - I'm in the banking world - actually, it was the Mortgage Brokers that created this mess, along with non-banking management/executive types that created/approved sub-prime products and sold them on the secondary market - stuff like 1% teaser rates, no money down, interest only payments, negative amortization, 120% loans, arranging for 2nd's to come up with a down payment or to also finance cars and boats - tons of money was made with mortgage brokers all over the place in store fronts - they are not considered bankers and very often a bank was never involved as loans are often sold directly to the secondary market - Wall Street, specifically to hedge funds. Some of the big banks were also involved as they have mortgage brokers on the payroll - at least they did.