Quote:
Originally Posted by Shotsie
It would be one thing if it was just a failure on the bank's part to assess risk as far as loan applications, then your argument might hold a minuscule amount of weight, but it wasn't - it was intentional and systematic fraud. They INTENTIONALLY gave loans to people they knew weren't going to be able to pay them back so they could bet against those loans on the stock market and make even more money. The worse the loan, the more money they made.
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How is that fraud? it's a simple contract, person agrees to pay $XXXX per month, then fails to pay...
it's perhaps a bit sleazy to give loans to people who likely will have trouble making payments, but not illegal in any way, and certainly nothing new in the business world...
The only party in the whole scheme that may have been defrauded was probably the investors that bought assets they were tricked into believing were less risky than they really were... but this is debatable too, one could argue that investors failed to correctly asses the risks of those assets... or perhaps rating agencies were involved in the "scam", or maybe someone just made a mistake, which is very possible too, since this type of asset was relatively new and difficult to asses risks on...
it's not clear at all that anyone was truly defrauded here, and certainly not the home buyers, they came in for a loan, agreed to the terms, signed the contract...
there is this pretty well known quote, which sums up the whole situation quite well:
"Never ascribe to malice that which is adequately explained by incompetence."
Napoleon Bonaparte