Prudent Bankers and Tony Soprano

Much has been said about the mortgage industry to the extent that there are many foreclosures and other problems.

It seems that some lenders were too lenient loaning money to others. Many of the loans would not have been made if the lenders were more prudent. One hears that some of the loans were made without any down payment. Some were made to only repay interest and not principal monthly with a balloon payment for the balance eventually. Some were made to the extent that the borrower would not be able to pay if rates went up even to a very small degree. Some loans may have been made without proper inspections, appraisals, or surveys. In todays housing market for some areas some houses may be worth less than the current mortgages on them.

Some institutions made high risk loans to obtain higher rates of interest and possibly other higher fees.

Prudent bankers would require down payment and perform a means test to make sure the borrower could repay. They would also require a home inspection, a survey, and an appraisal.

Our savings and checking deposits are insured for the most part and make up the bulk of the funds for mortgages in America. If a bank fails, the depositors are protected for the most part being insured by the FDIC up to a certain amount of money. Failed banks will be bailed out by our Federal government for the most part.

Who were these people that jeopardised America's mortgage system and other credit markets in America and maybe the world? Was there criminal intent? What can be done to prevent this in the future?

This all seems like something America's favorite fictional gangster, Tony Soprano, would do.