Ten subprime mortgage myths from the Fed (some of which aren't really myths)

According to Federal Reserve Bank of Cleveland senior research economist Yuliya Demyanyk, "On close inspection many of the most popular explanations for the subprime crisis turn out to be myths. Empirical research shows that the causes of the subprime mortgage crisis and its magnitude were more complicated than mortgage interest rate resets, declining underwriting standards, or declining home values. Nor were its causes unlike other crises of the past. The subprime crisis was building for years before showing any signs and was fed by lending, securitization, leveraging, and housing booms."

Then she follows that up with a list of Ten Myths about Subprime Mortgages, and I have to tell you: I am not impressed. Many of the "myths" she lists are actually not myths -- and her explanations prove that they aren't myths.


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