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Approval standards to increase production

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Reference no: EM132124925

Please discuss the following:

As demand increased for these mortgage backed securities, lenders reacted by relaxing their approval standards to increase production. No longer were "all" borrowers required to document their income and ability to make the mortgage payments. Yet these "Sub-Prime" mortgages were still being sold by Wall Street as safe and stable investments. As well, with the increase in "cheap and easy" money, a new group of home buyers emerged causing U.S. housing prices to rise, and speculative development to increase. Could this situation continue without any market correction?

There are many we could blame for the "Sub-Prime" crisis. Please comment on the culpability & responsibility of the following: Wall Street Investment Firms, Mortgage Bankers, Sup-Prime Borrowers & Real Estate Developers.

Reference no: EM132124925

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