Where did this whole subprime crisis that has tripped up the world economy start? There are a number of reasons why lenders became more aggressive in lending to those less qualified and why people who could not afford home payments bought houses anyway. Both come down to bad judgment and greed. The following article in the New York Times breaks the story in 1999 and together with the American Enterprise Institute they point out that if there are problems with these loans, the American taxpayer will foot the bill.
Any time lenders or borrowers make bad decisions in credit worthiness, they should pay a price. Unfortunately, in this case, the shrinking percentage of Americans who pay income taxes will bail out both sides and pay for the hangover from a party that most didn’t attend, and that’s not right.
Please click on the link below to view the New York Times article: