Monday, March 09, 2009

Who's Responsible For The Mortgage Crisis?


OK, there is an awful lot of finger-pointing regarding who is responsible for this mortgage meltdown. The Democrats are blaming the Republicans for loosening up bank/finance regulations. The Republicans are blaming the Democrats for encouraging the sub-prime mortgage market (loaning to people who wouldn't ordinarily qualify for a mortgage). Lots of other people are blaming the CEO of the large financial institutions for being so greedy. It's funny but everybody has somebody to blame but nobody blames themselves.

In my opinion, there are many factors that contributed to the issue. Decreased regulation made it easier to get away with some questionable actions. Encouraging the sub-prime market got banks to loan to people they normally wouldn't loan to (the same people that are defaulting left and right). However, even with all of that, it comes down to one thing: greed.

It seems that everybody is after easy money. Buy a house you can't afford and, in a couple months, flip it for huge profit. Get a loan you can't afford and, before it adjusts, refinance for a better rate (because your home will be worth twice as much... right?). How many people fell into that trap? Of course, it's not just the consumers. There was greed on every level. Mortgage brokers who signed people up for loans they knew were unaffordable because they could just load it into a mortgage backed security and not have to worry about it anymore. The banks who  sold the securities to investors. There was massive amounts of greed at all levels.

What ever happened to doing the right thing? Not in this country any more. Now it seems to be do whatever gets you the most right now. It doesn't matter if it hurts somebody down the road. It is a sad, sad world when most people seem to care far more for their own wants (not needs, wants) than for other people. Whatever happened to honesty and integrity. I'm convinced that those two traits would have prevented the housing crisis.

Yes, there is plenty of blame to go around, but we miss the largest culprit of all. The me first, foremost, and above all else mentality that seems to describe an astonishingly large number of Americans. Now, of course there are plenty of people who are simply victims of circumstance (and the press loves to do segments on them) but for the most part, we're victims of our own greed.

Maybe we're not as cool as we think we are...