LIBOR Deception...Is Finance Today's Wild Wild West ?

During the housing boom, borrowers constantly tried to get as much house as they could afford.  They wanted Interest Only loans, Adjustable Rate Mortgages, Limited Documentation, Stated Documentation, NO Documentation.  Whatever the lenders were offering that would get them into that house, get them approved for that mortgage - they went after it. 

Adjustable Rate Mortgages (or ARMs - any mortgage that the interest rate of the loan is not fixed), along with Student Loans, financial derivatives and a lot of other financial products were tied to the LIBOR index, or the London Interbank Offered Rate.  This is the interest rate one bank will loan money to another. LIBOR is used around the world as a signature index.

INTRODUCTION - Or Why I Started This Blog...

 

The idea for this blog came to me some time ago, but I never really seemed to have the time or the guts to do it. What's different now ? Well, not much, and a lot. I do have the time (I always did, it seems), but I did not have the nerve to really blog about the current mortgage, finance, or real estate industries.  It's been a rough four years for the financial sector of the U.S. economy, especially for mortgages and real estate.

They have all taken a beating, and public opinion has rightfully been very negative. I'm not saying the public isn't correct  in feeling the way they do. I agree with them whole heartily.