Credit Crisis? Subprime Meltdown?

Washington Post three part series on credit crisis/subprime mess - good stuff. Even better was This American Life's story, The Giant Pool of Money.

The part that bothers me most is the amount of fraud and lack of financial sense that must've been going on when brokers were selling mortgages to folks without checking salary or credit records, people who clearly could not afford them. Sub-prime mortgages have the highest rates -- which brokers and Wall Street love -- but the only people who qualify for the sub-prime are the ones with bad credit and low income, people who shouldn't be taking mortgages or refi's out.

Where was the consumer advocacy here? The brokers only cared about re-selling the mortgage and making their fees, and the people taking out no-interest ARMs - surely they knew they had to refinance before their rates went up?

Here's the thing. Buying a house is one of the most stressful and confusing things I've ever had to do. I firmly believe its all a scam for realtors, lawyers and brokers to make money on fees and padding, its designed to keep an industry alive. I'm a relatively intelligent, college educated man - I read all the books, blogs and websites. I get it. I just don't understand why it has to be so convoluted.

I think every high school should spend a good month on consumer education - how do I apply for a mortgage or car loan? What do credit ratings mean? Banking, savings, retirement accounts, doing your taxes. Why don't they teach that kind of stuff? Most regular people never use calculus or algebra, but we all apply for loans, open bank accounts and use credit cards.

The Bubble - washingtonpost.com