Where was the regulation? | AspenTimes.com

Where was the regulation?

Dear Editor:

The current financial crisis evolved as follows:

Investment bankers began instructing “servicers” (like CountryWide and DiTech, which is GMAC) to go ahead and loan money (not just on homes but also on equipment, cars and credit cards) to people whose credit ratings where a bit below the normal standards, in order to bundle this loan paper to sell to investors.

Now these people are not poor people. They are people who had jobs but did not know how to live within their means. They were able to buy a house that was most likely just beyond their means, but they could buy it with 5 or 10 percent down.

However the investment bankers did not care nor were they REGULATED! What they saw was a chance to bundle this paper and sell it at a profit to other countries and to retirement funds, etc., while touting the “fact” that this was grade A paper. They lied.

When the economy shifted down and people started to lose jobs (ask yourself why that happened), these people could not afford the cars, credit cards and homes they bought. Now understand these are working-class Americans. These are the people the government is supposed to protect from fraudulent “financiers.” BY REGULATING THEM. This is how the financial collapse happened.

It was not because Freddie and Fannie gave loans to poor people. In fact (check it out) they did not give loans to people who could not pay as long as they had jobs. It is when they all (poor and middle class) started to lose their jobs because of this administration’s failed economy. Do not let people hoodwink you into thinking this was just a mortgage deal loaning money to poor people. It was not. Look it up!

TJ Krest


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