How high-risk mortgages crept north
December 13, 2008 - 7:35am
How high-risk mortgages crept north
The untold story of how elements of the first Conservative budget in 2006 encouraged big U.S. players such as AIG to make a push into Canada, creating our version of subprime mortgages
http://www.theglobeandmail.com/servlet/story/RTGAM.20081212.wmortgage13/BNStory/Front/home
"Just yesterday, Finance Minister Jim Flaherty repeated the mantra that the government acted early to get rid of risky mortgages. What he and Prime Minister Stephen Harper do not explain, however, is that the expansion of zero-down, 40-year mortgages began with measures contained in the first Conservative budget in May of 2006."
Love American Style. Don't you just Love it ?
I think Harper was put into office to do things just like this. America repealed the Glass-Steagall Act in 1999, a Senate measure promoted by Texas Repug. Senator Phil Gramm - and signed by Bill Clinton. The repeal of the Glass-Steagall Act de-regulated the financial derivatives industry, which was the Sine Qua Non (in other words, essential) for the Perfect (economic) Storm that the United States is now experiencing.
A recent example of the effects of that particular Senate bill - Mr. Madoff's hedge fund fraud.
http://finance.yahoo.com/news/Madoff-alleged-50-billion-rb-13819411.html
In case the connection isn't clear - mortgage-backed securities were the bread-and-butter product of hedge funds. And the workers in the mortgage industry were compensated based on the number of high-risk mortgages they sold. One example of the lenders who were involved in this scam - Home123.com.
I had an old engineering friend who needed a job & ended up working at Home 123, selling high-risk mortgages. I was vacationing at their place for a few days & got to spend an entire afternoon at the Home123 offices, listening to their sales pitches, over & over & over again.
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http://LASIK-FLap.com ~ Website Created by Injured LASIK Patients
The Globe gets credit for publishing the article. The problem is the disconnect between articles such as this and editorial support for the continuation of a Harperite government. These are the LAST people we need with their hands on the wheel of the economy.
And what did the NDP have to say about this? At a time when it was clear that the US housing market was already in trouble due to the same risky lending practices?
Nothing.
Both the working people who were conned into buying houses at inflated prices and the taxpayers at large (though CMHC) are going to pay dearly for this.