In reading all of the information on LOANS GONE BAD, am I the only one noticing something is not right about the finger pointing game? If you believe what you read, mortgage brokers and loan officers ruined the lending industry. While they may have played a large part in selling the loans, who offered them?

What happened to the old adage that he who has the gold makes the rules? Does anyone understand that you CANNOT get a loan unless a bank approves it?

Who gave the mortgage brokers the full speed ahead sign? Who gave the industry not only the guidelines but the monetary incentives on which loan programs to sell? Who created the no money down, no income, no asset qualification underwriting guidelines? Who rated these loans triple A and sold them to investors?

You will hear complaints of all the money those unscrupulous mortgage brokers made but you will not hear about the substantial amounts of money made by banks and Wall Street on the sale of these loans. This part of the business does not have to be disclosed to the consumer. You do not hear and will not hear these profits being discussed in the news.

Banks adopted these guides and sold and/or bought these loans. None of these loans would have been funded if there had been some good old fashion common sense underwriting.

It used to be that a bank would not do a no money down loan because the theory was if a borrower got into trouble and had no investment in the property it would be easier for them to walk away from the property. There should be no surprise that this is what many borrowers are currently doing.

The bottomline is EVERYONE is responsible for this walk on the wild side of lending. The consumer needs to read what they sign and educate themselves on their mortgages.They need to borrower what they can afford. One should not treat their home equity as the never ending source of money to be used to buy whatever they want when they want.

The consumer, the broker, the banker, Wall Street and the investors could not resist the great money give away. That is exactly what it was. One could obtain a no money down, no income qualification, and no asset qualification mortgage. A salaried individual could qualify for a no income qualification loan. Even an investor could qualify for a no money down, no income qualification loan.

Did the banks not see a problem here? What happens when the value of the properties go down, and payments take a tremendous hike upwards after 2 to 3 years? I used to ask this question of lenders and it was a question that fell on deaf ears. A lot of money was being made and no one wanted to hear it.

On the other hand, banks were being pushed to make more home ownership possible for more people. Therefore they did this and gave it a risk based pricing. I just never understood how persons who had a harder time qualifying for a loan would be ablet to afford such high payment adjustments.

Everyone became intoxicated with avirice and we now have quite a hangover.