Upcoming Classes

Search CFLA's Article Archive:

Who Is Responsible for the Housing Collapse?

minyanville.comMay 7, 2012

By Andrew Jeffery

The darkest days of the housing market's downward spiral may be behind us, but the battle over who should shoulder the blame is rambling on.

In Friday's Wall Street Journal, Nick Tamiraos cited a paper published by the Federal Reserve Banks of Boston and Atlanta that aims to dispel the popular notion that Wall Street, not Main Street warrants the harshest chiding for the financial crisis. Not everyone agrees with the Fed economists' viewpoint, including Madhaus over on Bay Area Real Estate Trends, who isn't convinced that we should let bankers off the hook just yet.

The Fed paper pooh-poohs the notion that we should heap blame on "industry insiders" like mortgage brokers and traders at Wall Street firms like Goldman Sachs (GS), Bear Stearns (JPM), Merrill Lynch (BAC), and Lehman Brothers (BCS) for duping the rest of us into believing that their securitization machine could ensure that the real estate party would last forever. Instead, they propose the "bubble theory" where the real culprit was borrowers' belief that home prices would never go down.

It is easy to see why the paper has sparked from the populist camp. At a time when millions of homeowners still face the prospect of losing their home to foreclosure, piling on and blaming them for causing the crisis isn't a popular viewpoint. It isn't that far off, however: Borrowers are to blame for the crisis, since record levels of demand had to come from somewhere.

But implicating borrowers isn't the same as absolving bankers.

Each side played their role. Wall Street banks widened mortgage underwriting guidelines beyond rationality, opening the market for homes to borrowers that in hindsight had no business borrowing that much money. Mortgage brokers peddled the product, which was endorsed by rating agencies like Moody's (MCO) and Standard and Poors (MHP), while Realtors waived their pom-poms and promised home values would never go down. Borrowers, some by coercion and some by free will, took the bait -- hook, line, and sinker.

Cash poured into the market from abroad, fueling the bubble even as home prices began to wobble. In 2006, I sat in meetings and listened in awe to European bankers who had flown into New York with a single order from bank executives: Put money to work in the US housing market. They didn't understand what they were investing in, and didn't bother to learn. They just didn't want to be left out.

In the final analysis, any assessment of the housing market's collapse that does not implicate all parties, from borrowers to bankers to regulators to lawmakers, is incomplete. Commentators aiming to absolve certain parties are ignorant at best and engaged in willful deceit at best.


Back to May 2012 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

SEE BELOW- http://www.certifiedforensicloanauditors.com

Call us toll free at 888-758-2352

Bookmark and Share
spacer
Facebook Like us on Facebook
Twitter Follow us on Twitter
YouTube View our YouTube Videos
LinkedIn Connect to us on Linkedin
 
BBB Logo

 

spacer
Contact us or view our Sample Documents & Audits by completing the form below.

  • Reload
  • Should be Empty:





 

DVD Sets Only $99

 

FREE Mortgage Fraud Analysis

 

Order Cutting-Edge Services Now

 

Quiet Title Packages from Licensed Attorneys

 

Affiliate Services

 

CFLA Sponsored Attorney Links

 

Take-Home Education Package

 

ALB Law Firm

 

Advocate Legal

 

The True News Network

 

Rubenstein Business Law

 

Atighechi Law Group

 

Scunziano & Associates

 

Get Certified to Perform Mortgage Securitization Audits

 

CFLA Training Academy

 

Expert Witness Services

 

Cutting Edge Expert Securitization Reports

 

CFLA Credit Cards

 

Breaking News

 

Letters to the Editor

 

CFLA Weekly Newsletters

 

Code of Ethics

 

Testimonials

 

Instructional Videos

 

Job Opportunities

 

License Opportunities

 

MARS Rule

 

Product Samples

 

Resource Links

 

Servicer Information

 

Foreclosure Laws

 

REST Report

 

Quiet Title Packages from Licensed Attorneys

 

Advertise on CFLA

 

Advertising Space: Mortgage Securitization, Quiet Title

 

Certified Forensic Loan Auditors, LLC
13101 West Washington Blvd.
Suite 444
Los Angeles, CA 90066

Toll Free: 888-758-CFLA (2352)
Mobile Users: CLICK TO CALL
info@certifiedforensicloanauditors.com

 

   
 
CFLA IS NOT A LAW FIRM AND DOES NOT PROVIDE ANY LEGAL ADVICE. CFLA DOES NOT OFFER FORECLOSURE CONSULTING OR FORECLOSURE RELIEF
SERVICES. CFLA DOES NOT OFFER OR ASSIST WITH ANY LOAN MODIFICATION SERVICE. CFLA ALWAYS RECOMMENDS THAT CLIENTS RETAIN COMPETENT COUNSEL IN THEIR RESPECTIVE JURISDICTION. CFLA HAS A FREE PROGRAM TO REFER CFLA CLIENTS TO LAW FIRMS IN NEARLY EVERY STATE AND CFLA
DOES NOT CHARGE OR OBTAIN REFERRALS FEES FOR THESE SERVICES. SERVICES NOT OFFERED TO RESIDENTS OF THE STATE OF NEVADA.

 
Home About Us Privacy Policy Terms of Service Disclaimer SERVICES Careers Contact Us
 
COPYRIGHT © 2013 . - All rights reserved.