In the book, Surviving the Perfect Recession, Dr. Steven Price discusses the second cause of the perfect recession: Subprime loan crisis.
Banks used to lend only to credit-worthy borrowers. But, banks realized that instead of making small profits by holding mortgage for years, they can make big profits rapidly by originating loans and then quickly selling them to the government or to the big mortgage companies such as Countrywide, Bank of America, etc. Here were the banks' thoughts: I can get my money upfront, it's not my problem if the mortgage holders can't make their monthly payments, and who cares about who qualifies for a loan.
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