Not to mention a racist if one were to raise flags about risky lending to poorly qualifying potential home buyers. I distinctly recall, in 2006-2007, numerous news stories about how the lending practices of banks were racist based on a data-driven analysis of skin color as a factor when adjusting for credit scores. If you look back, the warning signs were all over the place. I live in a non bubble area, but there was still some hanky panky going one here. A friend trying to sell his house in 2004 was warned by a Realtor to take the "funny" bid. It was one of those American dream loans were the potential minority purchaser didn't have a down payment and temporarily borrowed the money from the seller for closing costs. Those types of feel good programs ended up hurting a lot more people than it helped..
You are not kidding. In 2007, my wife and I eventually sold our home for $176.5K. The competing bid was a sales price for $189K. And we opted for the contract where the sales price was $176.5K. Why? Well, in the other 'larger' deal, the FHA program deal, we would have had to pay over $10K in closing costs to the seller (and the lender's cheerleader) as part of this great program. The larger deal would have netted us an additional $750 but it just seemed too dubious and it really annoyed me how the lending officer was pushing the loan so hard...and no wonder, she was going to get a substantial amount of those closing costs.
I can only imagine some of the people on my street who were also trying to unload their homes after our sales price was officially transacted at $176.5K and their homes were not moving at $185K with similar comps. Of course it didn't help them that my wife was a Realtor and we could afford to drop the price lower since she could forego her commission.