4 Thoughts on Why did Wall Street buy subprime mortgages from the original lenders if …?
  1. Reply
    Guess Who
    February 16, 2014 at 5:47 am

    Greed. They bought the subprime mortgages in order to sell them to someone else for a profit. Who cares about the borrowers?

  2. Reply
    A Hunch
    February 16, 2014 at 6:18 am

    Try to watch “House of Cards” that was shown on CNBC or MSNBC. It’s an hour long show that does a great job at telling the entire subprime mortgage story.

  3. Reply
    February 16, 2014 at 6:54 am

    When you remember that “Wall Street” does not mean a large company or a bunch of rich bankers- but millions of individual investors all trying to invest their money for the best return possible- it all begins to make sense.
    Right now today- you can hear on the radio or see on web pages- commercials promising a big return “for little or no risk”. Back 10 years ago those same commercials would have been saying that same thing and selling shares in mortgage backed securities. Don’t blindly trust the ones you hear today either- whatever they are selling- there is always risk.

    Everyone expected the real estate would continue to go up in value and those homeowners that could not repay their loans would simply sell the houses if they had to so they could repay their loans.

    I know it seems very foolish in hindsight- but I guarantee you are doing something this year that will seem very foolish in hindsight also- I just don’t know what it is.

  4. Reply
    February 16, 2014 at 7:31 am

    They bought them in order to “bundle” them with other securities and re-sell them to make money on the sale. The brokers purchased these sub-prime mortgages for much less than the original borrowers paid.

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