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Challenge4Ufloyd OP t1_je05a5s wrote

Reply to comment by NRA-4-EVER in 08 crash part 2? by Challenge4Ufloyd

That’s exactly what I’m saying NRA Forever 🫡🇺🇸🍆. Subprime mortgages created an illusion of affordability, but they often contained hidden fees. In addition to the adjustable rate, subprime borrowers had other added costs—sometimes even the principal increased over time.

Subprime loans were three times more common in low-income neighborhoods. Predatory lenders used unfair or discriminatory practices to convince borrowers to take on mortgages they couldn’t afford. Often, minorities were targeted: According to data from the Home Mortgage Disclosure Act, Latinos, and African Americans were 2.8 times more likely to be offered a subprime loan than were whites. Ohio’s Assistant Attorney General, Jeffrey Loeser, described how predatory lenders would even go door to door selling subprime loans to consumers who didn’t understand them.

Lenders used this easy opportunity to secure a bag and then were shocked that the people they approved (who shouldn’t have been approved) couldn’t pay it back.

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NRA-4-EVER t1_je08jgs wrote

Look, I understand the sub prime packages were less then desirable, but so were high yield bonds (junk bonds) in the 80s which caused a bit of trouble too... The problem is with the comments of people after the crash attacking the lenders without examining WHY they changed course.

The fact is, the banks were attacked for years for being so called racists for not giving more loans to minorities. However, the obvious reason they didn't was because they statistically had less money as a community. The banks are like most people and don't like being called racist or have people screaming in their faces in board meetings.

If you follow the rise of the worst lending practices you will see the rise of political activists pushing them. Personally I wouldn't have cared if they bothered me, but corporations are weak and callow. I mean look at how they dance for the twitter mobs insane whims today.

Should the loans have been given? Probably not, but I will never excuse people that sign a contract. Just like the people that purchased high yield bonds, they were looking for a great deal.

Btw, to answer your original post question, there isn't anything out there like the sub prime mortgages to cause that problem. These bank failures have been about the interest rate hikes which affected the bond market, causing the banks to lose money selling the worthless bonds. The market could crash (more) but it's not like 08.

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nova_demosthenes t1_je0663c wrote

Bro, there's totally economic disparity in the US, but of course the poors predominantly received the SUB PRIME mortgages.

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