Key features of the mortgage crisis.
1. Many homeowners took out mortgages that they had no reasonable probability of paying.
2. Many of those same homeowners were induced by unscrupulous bankers and mortgage brokers into taking out those loans in the first place.
3. The banks and financial house who packaged those loans into derivative securities didn't care (even when they knew) that a significant number of those loans would eventually default.
4. When this happened, everyone pointed at everyone else as the cause of the problem.
As Ralph Cioffi, the former Bear Stearns hedge fund manager and fraud defendant, said in a recent Observer profile about anger at banks and bankers. "People don't want to take responsibility for their own actions." Of course, he was talking about borrowers, not bankers.
For more Wall Street "color," read the article in the New York Observer.
The Foreclosure Fiasco and Wall Street’s Shrug
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