WRONG!!!!! Banks were FORCED by LAW to write mortgages to the "under-privileged" (read that: BLACK and HISPANIC minorities) and accept as statements of fact, a mortgage applicant's income, when that applicant could not prove how much they made in a month.
Banks wrote those mortgages BY FORCE OF LAW and then quickly packaged them up and sold them off to Fannie Mae / Freddie Mac because both Fannie and Freddie BY FORCE OF LAW were mandated by the Federal Government to buy every mortgage presented to them.
Anyone who wants to know why the mortgage industry "blew up" the banks and we experienced one of the most horrific downturns in the housing industry need look no further than the FEDERAL GOVERNMENT which imposed the rules through threat of legal action, upon every bank in the country.
I worked in the Mortgage division of one of the country's largest Mortgage Lenders while that bubble built. We all knew it wasn't sustainable, yet the Government forced all the banks to keep writing loans to people with no documented source of income.
WTF did the stupid Government think was going to happen? And to blame it on the banks when it was GOVERNMENT MANDATED to write loans to people with no source of documented income was a disaster waiting to happen.
Tell it, brother.
Most people don’t get what happened, or how important it was.
You are correct sir! You also should mention bow Rainbow Push and other groups extorted banks to make loans to unqualified minority borrowers. And the banking examiners looked the other way.
Yep—that’s a true, though the mortgage banks piled on by also fraudulently selling a lot of bad, bundled/securitized mortgages into the private market, too.
This is exactly right. Bank of America pulled out of our state because they couldn’t afford to continue to make the bad loans that were required by the feds under the CRA in order to continue to do business.