Quote Originally Posted by kydonky View Post
Yes!!......A banker/CEO in Louisville Kentucky based Providian Financial saw that he could charge over 30% interest issuing subprime credit cards. I attended the meeting when this plan was anounced. All of the projections were based on how much interest would be charged. I thought that day that this was a high risk gamble. 18 months latter bankrupcy.

They forgot one basic rule. Its not how much you charge, it's how much you collect.

The Big Mortgage brokers followed this model. Subprime loans with high rates (and fees, poinst etc.) but they added the fact that they would not retain the risks and sell these mortgages as securities, thus the great resession and financial meltdown of 2008.

Politicians did not push subprime lending (they did not stop it either). It was the major mortgage companies Countrywide, BOA, etc. They made their money in the fees and origination then they sold them to AIG, Leman Bros, Fannie Mae, Freddy Mac. There were no regulations to oversee bundling mortgages as securities.

So YES!!!!! More than one banker decided to put investors money at risk to boost their bonusess, heck it was only play money anyway.
Wrong as usual.

Barney Frank and affirmative action were huge factors. Read the whole article. Mr. Frank insisted Fannie and Freddie were in groovy shape back when the Bush admin was trying for tighter regulations.

Frank's fingerprints are all over the financial fiasco - The Boston Globe