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... are a little more complicated than you portray them.

Essentially, people were being conned into buying a house at a wildly inflated price (or circumstances forced them to buy - e.g. because of a divorce or a childbirth). The immediate beneficiary of this scam is, of course, the seller of the house. But the mortgage lenders come a close second. And it's not like the banks were rubes just in with the 4 o'clock train from Nowhere. They knew perfectly well (or at least had no valid excuse not to know perfectly well) what was going on.

A bank that knowingly lends money to a person for the explicitly stated purpose of placing that money in a pyramid scheme, like the bank that lends money to a dictator in some banana republic, should be neither surprised nor entitled to cry foul when the former client walks away from the whole sorry business.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Aug 24th, 2010 at 05:07:45 PM EST

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