jficquette, the private banks originated the bad debt. Remember it’s the banks who wrote the mortgages and interacted with the homebuyers who couldn’t afford the houses they bought.
It’s the banks who didn’t do the underwriting and play by the rules.
It’s the banks who told consumers that they could afford those overpriced houses.
It’s the banks that didn’t verify income of debtors although they could do so with the IRS.
It’s Wall Street and the banks that “innovated” and created new financial products.
Then the banks sold that toxic debt to the GSEs in the secondary market.
