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| Dave had a good post on this a while back. You might search Fannie Mae and Freddie Mac. But, you are correct. There were incentives to get creative to loan money to people you otherwise wouldn't. The banks could then bundle those loans and hand them off to Fannie mae or Freddie. Then, the wunderkinds in the funds saw this going on, said "Hey, we can do that too." and there you go. Make the deal, take the fees, transfer the risk to somebody else. Too good to be true. | |
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Bank Examinations
