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    Why banks have bad loans? For the most part I feel that it was the lenders who are the most responsible. They were willing to ignore the ability to pay on the loans in order to lend as much as possible. The lowering or even turning of the back on the qualifications of the borrower turned out to kick them in the backside. However, the borrower also has to take some of the blame by not knowing exactly how much they could afford. I know it is interesting to see as I am currently in the process of looking at buying a home. Explain.

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    The reason for bad loans and the problems in the banking industry have to do with a combination of lenders who are ignoring their own and industry safeguards and buyers who are not educated enough to understand how interest works or who are overly optimistic about the future. The industry has guidelines but the lenders only make money if they ...

    Solution Summary

    This solution discusses banks and the problem of bad loans.