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The U.S. foreclosure crisis was not just a subprime event

I agree with this blog post. Anyone that still believes that it was all hairdressers and other low income individuals that lied their way into a large mortgage that they could not afford that was the cause of the foreclosure crisis is uninformed, stupid or a shill for Wall Street and the financial industry.

Justice League

While I agree that the foreclosure crisis was not caused by subprime event, the article leaves out  that The Financial Crisis Inquiry Commission’s report (you can get it online) on the housing meltdown found most of the blame with risky lending practices by the banks, inflated home values by appraisers, and banks making money from originated fees by bundling and selling off a lot of the risk as MBS mixed with good and bad loans and getting the blessing of an A+ rating by the credit rating agencies.

Each month, the NBER Digest summarizes several recent NBER working papers. These papers have not been peer-reviewed, but are circulated by their authors for comment and discussion. With the NBER’s blessing, Making Sen$e is pleased to begin featuring these summaries regularly on our page.

The following summary was written by the NBER and doesn’t necessarily reflect the views of Making Sen$e. We will tell you, however…

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