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Who is to decide what is "substandard"? FNM/FRE/FHA? In other words, what you are saying is that the banks are not willing to lend at all except to dump the loans right onto the taxpayers. Why should those banks exist at all? Aren't they just like the DMV? or Post Office when 90+ loans are resold to the government agencies? The reason why they are doing this is because their books are too loaded down with bad loans yet to be written down. If the misbehaving banks had be closed out, new banks would be much willing to be engaged in real entreprenurial risk taking instead of going through the motions of being a public utility company relying on taxpayers and not mobilizing their own deposits at all.
posted by 76.118.39...
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