I have been reading more about the lending practices that were going on in 2005 and 2006. Holy cow. The buyers of houses were not coming in asking for loans, it was more like the mortage people were pulling in folks off the streets to sell them.

I remember how closely scrutinized I was when I got a mortage. I had to bear all my financial secrets... How long had I been working, how much I was making, how much in assets, and on and on... they were very careful. I had been a fairly frugal guy up to that point and when it was clear from bank statements I could back up my mortage. Then they started the sell tactics and I got the upper hand in negotiations with points etc...

this was clearly not done in the past two years. So why? Because the secondary buyers of the mortages saw the attractive rates. What they did not know is how little background was done on the buyers. So the GREED of the secondary people fueled the mortage companies to keep pulling people in off the streets.

My take. Look closely into stuff to good to be true. Buying Mortages is much more risk laden than people thought. As an individual if you personally are going to make a loan to make money, are you not going to make sure in everyway you can the person borrowing from you is good for it? Jeeeeez.

But if your job is just to sell that Mortage, sell, people will buy these things... one might feel free of responsibility to make sure the individual is good for the money. You as the seller of the mortage dont feel the risk directly cause you have been told the secondary market will pick it up. NOt good.

Where am I off on this, if you dont mind, experts? Is this way off base?