In one of the more interesting non-fiction books to come out (at least for people interested in that sort of thing) a former subprime lender shares stories of poor mortgage lending practices and greed -- items that led to the current mess that we're in. CNN Money reports on what auther Richard Bitner says about the mortgage industry:
He saw the shoddy lending practices that got us into this crisis first hand, and has chronicled them in his book, "Confessions of a Subprime Lender." By the time he quit, said Bitner, "Lending practices had gone from borderline questionable to almost ludicrous."
I think it's interesting that he points out that lending practices were almost ludicrous. He tells a story of someone in his company making a home mortgage loan to someone with a 54% debt-to-income ratio. Why? Because the loan investors were willing to pay it, and it meant a fat commission for the person making the loan.
True, the borrowers probably should have seen that this wasn't a wise financial decision, but it was also irresponsible of the mortgage lender -- and the mortgage investor -- to view this as an acceptable risk.
I think that the book probably proves what we've known for quite some time now: There's plenty of blame to go around for the current mess.
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