Wednesday, December 14, 2011

Fed: House Flipping Led to Deeper Housing Collapse

I'm afraid this goes much deeper than "flippers". I believe one of the core reasons for this entire mess is poor underwriting. And the reason for poor underwriting is that lenders were no longer holding the paper they originated. They became originating machines. Why would you care how a loan performed if you're not going to be responsible for taking the loss? The simple answer is you wouldn't care.

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