WHAT HAPPENED TO INDYMAC? AND WHAT HAPPENS NOW????????
1. What happened?
In my opinion, it isn't the housing markets fault for Indymac failing and other banks like them. They were a major player in the mortgage market without a doubt... However, banks hire investment analyzers to choose what they invest in to create a profitable rate of return for their clients. The investors for this bank chose to put too many of their eggs in the high risk loan market. That is what happened.
2. What happens now?
Once again in my opinion, and I am not an economic advisor to anyone but myself, this is a good sign for the future..... Banks like this made it too easy for too many people. Loans were being made to people that had no business buying a 1976 Pinto on credit, much less a 4000 sqft. mini mansion.... Don't get me wrong, there is a need for banks to make big loans and generally they are more risky. However, the banks should be responsible in there qualifying terms AND their own portfolio should have a conservative counter balance to prevent something like a this from happening to them.
Now, I am no expert, and I would love to have someone's opinion that is..... I have a friend who IS qualified to talk about it and I am going to ask him to comment as soon as I get a hold of him. However, I want to know what you think as well... I hope I learn something new today!
Have a wonderful day!!!
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