Mortgage lenders of 2008 never intended to collect repaid loans

Evidence

Don’t be surprised that the high-and-mighty financiers of Wall Street would bother financialising the modest homes of poor people: having borrowed as much as they could off banks and rich clients in order to place their crazy bets, they craved more – since the more they bet the more they made. So they created more debt from scratch to use as raw material for more bets. How? By lending to impecunious blue-collar workers who dreamed of the security of owning their own home. What if these ‘little people’ could not actually afford their mortgage in the medium term? In contrast to bankers of old, the Jills and the Jacks who now lent them the money did not care if the repayments were made, because they never intended to collect. Instead, having granted the mortgage, they put it into their computerised grinder, chopped it up digitally into tiny pieces of debt, and repackaged them into one of their labyrinthine derivatives – which they would then sell at a profit. By the time the poor home ‘owner’ had defaulted and her home was repossessed, the financier who granted the loan in the first place had long since moved on. — Yanis Varoufakis, Technofeudalism, 225

Categorization

• SEED: The ‘they never intended to collect’ model of extractive finance is a strong angle for comparing to platform data extraction.
• corroborated: 2 independent passages support this claim — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 225
• XREF: connects to: The 2008 financial collapse produced no accountable wrongdoers and no industry reform — Albert Bandura, Moral Disengagement: How People Do Harm…, 1564; Securitization let lenders profit without ever collecting repayments, incentivizing predatory subprime lending. — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 225

Broader Connections

• The 2008 financial collapse produced no accountable wrongdoers and no industry reform #complicates (0.95) — Albert Bandura, Moral Disengagement, 1564