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Borrower Beware: Lessons in Lending from the Subprime Crisis

We have often heard it said, “Something too good to be true probably is.” And so it applies to the way loans were issued in the years leading up to the subprime lending crisis. Political forces identified a need for low-income home-ownership and impressed on capital institutions the importance of more engagement with a high-risk market. Some simply blame the loan crisis on banks and greed. “The greater the profitable opportunities, the greater the coercive force. Ethics be damned” (Watkins, 2011, pp. 365).