they know
I still have no fucking idea. But US radio programme This American Life has an incredibly colourful, in-depth explanation about just how it started. It’s pretty much identical to what happened with buy-to-let mortgages here.
They interview people at the epicentre of the shit storm, including a young barman-turned-mortgage salesman who, at the height of the cheap mortgage boom, was making, $70, 000 a week in commissions.
“[Another]One was Clarence Nathan, who sounded like a nice guy, but his house was in foreclosure, and he did not have full-time employment. He had no assets to speak of, and yet he received a loan for $450,000.
And then Mr. Blumberg asked Mr. Nathan “Would you have loaned you the money?”
Mr. Nathan answered: “I wouldn’t have loaned me the money. And nobody I know would have loaned me the money. I know guys who are criminals who wouldn’t loan me that, and they break kneecaps.” (NYTimes)”
If you work in the City, it’ll make you rage at greedy fuckers like Mr Nathan. If you don’t, it’ll make you incredibly angry that you taxes are bailing these greedy fuckers out.
