Last Friday I was in Fort Meyers, Fla., shooting a piece on the foreclosure court there. Watch the report, which we crashed for air Friday night:
Toward the end, the real estate agent we interviewed started telling me how the government is responsible for the mortgage mess because it forced banks to lend to people who really couldn’t afford their homes. Through the use of clever editing, you don’t see the steam bursting from my ears or the top of my head blowing off.
Why? Because hearing this kind of nonsense just makes me crazy. The government FORCED banks to make risky loans? To become greedy? To start selling mortgage "products"?!
No. No. And no again. Where do people get these ideas? Never mind.
I kept my cool during the interview, but afterward in the "two-shots" (TV talk for the wide establishing shot), I let that poor guy have it. He’s into the Kool-Aid on this subject, and needed schooling. I delivered an on-the-spot lecture, then e-mailed him this superb article from the Sunday Baltimore Sun on the anatomy of a bank failure.
Imagine this bank multiplied MILLIONS of times across the country during the housing bubble and you will begin to comprehend the origins, scope and magnitude of the problem. Just so you know, I recognize that the home buyer in the article who filed suit should have known he could not afford that house, so he’s as much to blame as the bank. But Suburban Federal was not doing the government’s bidding in making that loan.
Read, please, and then let’s discuss.