Anonymous
Anonymous asked in Politics & GovernmentPolitics · 6 months ago

Why do some people refuse to acknowledge that the 2008 crash was due to predatory loans, and that our current student loans are predatory?

Honestly, it sounds as if they're too stupid to learn how to use google and research what the term means and just focus on the words they understand "predatory" meaning the loans pounce on you.

Update:

"If you want to fix this, have the government quit having programs to give loans to people who cannot afford to pay them back." That is the very DEFINITION of a predatory loan. Loans that you KNOW someone cannot afford to pay back.

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  • Mike
    Lv 7
    6 months ago

    Before 2008, everybody in the real estate business was making money by selling houses and arranging mortgages for under qualified buyers who saw home ownership as a giant step to participating in the American dream. Contract prices were inflated so that the seller could give a buyer a "credit" at closing for the buyer's closing costs. Then a real estate appraiser who agreed to appraise the house at the inflated value was hired. The sales contracts contained the seller's credit provision, but the banks gave mortgages based on the full contract price. The banks assumed they would not have to foreclose because house values would increase so much, the borrowers would be able to pay off the mortgage balance when they sold the house. The banks didn't care anyway because they sold most of the mortgages which were packaged and sold in blocks to investors such as pension funds. Everybody got what he wanted. For a time, the plan worked, and borrowers who fell behind did sell and made enough to cover the mortgage. When that didn't work anymore, and the banks began actually losing money, they pretty much stopped writing mortgages.

    Student loans were originally a sort of feel good program to enable non-wealthy students to obtain a college education. I don't know what the default rates were until recently, but colleges abruptly raised tuition to the point that the loan balances could not be repaid unless the students all got jobs paying six figure salaries upon graduation. If the students' debts are forgiven, who takes the loss? The banks? If so, why would any bank ever give a student loan in the future?

    • Mike
      Lv 7
      6 months agoReport

      Re. appraisers: in my experience, the real estate brokers shopped for appraisers who, like everyone else in the process, played ball to keep getting referrals. Banks kept the quality loans in house and sold the schlock.

  • 6 months ago

    No one forces anyone to take out a loan.

    If student loans weren't so easy to get - the alternative scenario - lower income individuals wouldn't have the opportunity to pursue higher education.

  • Anonymous
    6 months ago

    Seek employment, to pay off the loans, good luck

  • 6 months ago

    Student loans aren't predatory, any more than a fisherman is a predator. They are manipulative, but ultimately they require someone to take the bait before anything happens. Your definition of predatory is so broad as to include any financial transaction. Profit is not, by definition, predatory.

    "A fool and his money are soon parted"...I guess they don't teach that in school anymore.

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  • 6 months ago

    I agree. We need to outlaw student loans entirely. Want to go to college? Work your way through or save up and pay cash.

    • Michael
      Lv 7
      6 months agoReport

      It will also make college more affordable. Colleges can charge whatever they want because thanks to student loans, anyone can pay the tuition bill. Later in life people may not be able to afford the loans they took out to pay the tuition, but what do the colleges care? They already got paid.

  • 6 months ago

    Prior to the crash you had every all the dem politicians posing for photo ops with the people they were bringing out of poverty by giving them loans they could not afford.

    The loans were not predatory. Neither are the school loans.

    If you want to fix this, have the government quit having programs to give loans to people who cannot afford to pay them back.

  • bil
    Lv 7
    6 months ago

    The great Democrat depression and great Democrat recession was due to DEMOCRAT/RINO federal reserve 'bank' supervision of 'loan' standards of member banks. Definition of 'predatory loan' ~ A loan made to a Democrat with bad or no credit history, that is impossible to repay.

    Source(s): Banks are required to follow these 'loan' standards which are ENFORCED by courts. Even if it takes down the economy of the planet...TWICE now. Unless you are a 'true believer' Democrat/RINO. In which case it 'happened' because of, voters rejecting a Democrat.
  • 6 months ago

    The 07/08 crash was deliberately orchestrated by the newly seated Democrat Senate that took office in January 07 . By July or August of 07 the Democrats had done enough damage to reverse 6 years of a thriving economy .

    Source(s): Re: " Predatory Loans " If you don't want debt , don't borrow money .
  • 6 months ago

    I know, right? It was predatory loans that caused the bailout of AIG, not campaign contributions to the likes of Joe Biden. It all makes perfect sense when you refuse to think about it.

  • 6 months ago

    Predatory lending only works because of ones greed.

    Allow that that lesson be learned the hard way.

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