I'm not worried about those people. You already convinced me that bank owners should have to eat those losses. Hey, wait a minute, they already did.
When the true history of the housing bubble is written, I believe we'll find that the fraction of bubbliciousness coming from the CRA and associated programs was perhaps one-fifth, perhaps much less.
Great. Who reimburses the banks for that one-fifth?
Actually, I agree that the banks should sue the politicians who voted the CRA and the regulators. Legally, it would be an uphill battle. The banks would have to prove that without the CRA they wouldn't have loaned to certain people, and that the cost of those certain people purchasing houses during a certain time lead to over-inflated housing prices, market distortions that posed an existential crisis to the bank and hindered the bank from fulfilling it's fiduciary responsibility. You'd hear cries and wailing from the left since a disproportionate amount of those people would be low-income minorities, and thus the banks would be labelled "racist".When the true history of the housing bubble is written, I believe we'll find that the fraction of bubbliciousness coming from the CRA and associated programs was perhaps one-fifth, perhaps much less.Great. Who reimburses the banks for that one-fifth?
You are confusing the roles of the parties involved.
The overwhelming majority of the actual liar loans written under the CRA, and most of the junk loans in general, were written by dodgy firms like Countrywide etc., who didn't give a damn about the soundness of the borrower or the soundness of the house's value, because they intended to sell that note within days of its being executed.
Then those loans were combined into "tranches" and assigned fantasy ratings of "AA" or "AAA" by Moody, S&P, and their fellow criminals.
Then the banks who were bailed out by TARP stupidly bought these stacks of feces at face value, although no law passed by Democrats or anyone else required them to do so. So allow me to break out the world's smallest violin in sympathy for their plight......