I agree with you. Alt-A loans do not require full documentation, but they are less risky than sub prime, because although Alt-A borrowers typically have lower credit scores, they usually have some investment properties, but with high loan/value ratios.
Sub prime loans are typically those with few or no assets, already have excessive debt, a track record of missed or late payments, low credit scores, judgments, etc.
So many of these borrowers know they cannot repay the loan, or don't plan on playing the loan, or plan to pay but circumstances happen where they cannot, and some meet their obligations.
Now lenders shouldn't lend to these people or should limit their exposure by making a small percentage of these types of loans. However they don't care if Fannie Mae, Freddie Mac, or a private institution will by them in the secondary market. Banks have to lend to some of them if they live in certain neighborhoods within the CRA guidelines.
Now investors shouldn't buy these instruments unless it is a small percentage of their portfolio and they are willing to take the risk knowing they can lose money.
So shame on everyone.
My comments on poor purchase decisions are really made with the hope that anyone who reads my posts and are in that boat would re-consider and change how they buy. They will be much better off. If they do or don't is none of my business, only I don't want to bail those out who made really bad decisions whether they be poor, average, rich, a corporation, or the government. Lastly those who are on the low end of the wealth gap will improve their lot in life if they quit spending with credit so much.
Regarding participation, I posted earlier that usually around 40% of registered voters do not vote in presidential elections and it is less than other elections, and that is sad. But voting also comes with the responsibility to educate one's self on the issues and understand how our government and economy work. Too many of those who vote just stick with a party line without giving their vote any consideration. And this is the true tragedy.
We all make mistakes in our lives, and many of us learn from them others do not. There is an old saying that "if you learn from your mistakes, I must be a genius." I have sure made my share of mistakes too.