Skin In The Game

The housing crises of 2008 was in large part caused by mortgage lenders approving loans to people they knew couldn’t afford them. The lenders then turned around and sold those mortgages to investors in the form of securities. Lenders made money underwriting and money selling securities. But when borrowers defaulted, lenders faced no risk. They had no skin in the game. On this week’s episode, Tom and Dylan discuss the necessity of having skin in the game and how that creates accountability.