Minority communities claime tha thte credit scoring system is racists because blacks have lower scores than whites.
Banks don’t want the negative image so they lend to people with shakey credit to avoid being labeled racist.
Banks also lend to borrowers with poor credit in order to make money on fees and on higher interest rates. When these mortgages were written, the real estate bubble was in full swing so even if there were foreclosures, the rapidly appreciating market would not, as the lenders believed, would more than make up for any loss from foreclosure.
Lnd to everyone who asks became the business model, if for no other reason than to avoid losses to your lending competitors.
Hence, credit worthiness or illegal immigration status became less relevant to the lending process.
Now, with the bubble bursting, the chickens are coming home to roost.
The banks have been making loans to illegals. This is a crime and the banks should have to pay a hefty price for their lack of responsibility. In the long run though, the citizens and the taxpayers will pay for the banks’ lack of responsibility. The banks bubbled the housing market along with the corrupt politicians who approved this practice behind closed doors, more than likely. When will our politicians learn? the answer is Never!