What did the U.S. Government offer lenders to overlook them?

An article by Diane Francis appeared in the Financial Post on Saturday, November 17, 2007. Titled “Subprime mess is a crime story” the article outlined key issues. Diane said “At the top were mortgage lenders, then Wall Street and others who exported junk debts to lenders around the world after prettying them up. At the …

A Guide to Subprime or ‘How to ruin your country’s economy too’

Economists in any country in the world – except the United States – should study the “interest only” loan. It is imperative so your economy doesn’t get hurt in the future. Just consider the United States as a training ground. We all saw the ripple effect around the world. If your country’s stock market lost …

Subprime Insurance Claims Signal the Start of Backstabbing

This is our mid-August focus on mortgage blues. Higher interest rates and falling property prices have contributed to rising delinquencies on subprime mortgages, which are offered to less creditworthy borrowers. This, coupled with increased relaxation of underwriting standards, has led to the bankruptcy of more than 50 mortgage lenders, the collapse of hedge funds, increased …

Subprime once hurt the elderly, now hurts the world

Subprime lending once hurt the elderly in the United States. It only took three more years for subprime to hurt all borrowers and the entire world economy. Back in 2004 subprime was not necessarily predatory lending. Others argued that mortgage fraud became predatory lending, which then evolved into subprime. Regardless of the position you take …

A perfect example of debt distortion

Here is history’s warning: “Every new loan that is larger than the last contributes to increasing over-all economic instability. The outcome of such has historically been a crash corresponding to the magnitude of this debt distortion.” The quote comes from our booklet “The History of Predatory Lending“. Here is a pefect example of debt distortion: …