Michael Lewis on the Subprime Mess

This article argues that the reckless borrower is as much to blame as the creditor. Lewis also points out that the real loser is the scrupulous subprime borrower who now cannot get a loan for his mortgage. Who is the winner in all this? In my opinion, it is the real estate agent who gets a guaranteed transaction cut, and the loan broker who pretty much gets paid regardless of how the loan turns out. It is a case of perverse incentives, where it is in the best interest of both of these parties to see the deal close - and no consequences if it goes sour later on. I for one, really hope that redfin succeeds in creating a new model for house purchases.