The ground work for these loans was layed by congress long before Bush II came to office. Congress complained that minorities weren’t getting their fair share of home ownership. So they demanded the rules be changed so it was easier for people to qualify... Hence “sub prime”...
At least that’s how I remember it...
The feds made a deal, a contract with the bank, to take on failed savings and loans, with the benefit that the bank would not have to carry the required reserves for many years.
Long story short, the feds reneged AFTER the deal, then put the bank in the tank. Stock in the bank went from 20 dollars per share to 90 cents per share, and the Feds took it over.
The shareholders sued the Feds. It went to the SUPREME COURT. Shareholders WON!! The Feds had to pay back all shareholders.
This is why the supreme court picks are so damm important.