The CRA opened the door to non-conforming loans. Once banks knew they could sell them, they care not whether the loan ever got paid back. I don’t club Dems because it’s convenient, although it is, I club them because they are destroying they country. Sometimes with the help of RINO’s. So, if your lender doesn’t care if you pay the loan back, why should you? Personal responsibility? That is a good reason, and admirable, but Wall Street doesn’t exhibit those traits any more than borrowers do. If you want people to be responsible with the money you loan them, you must be a responsible lender. Don’t be frivolous with your money. That includes paying $200 million bonuses and whatnot. Companies should be allowed to do that, but they shouldn’t cry foul when borrowers get sick of it and walk away.
Everyone has responsibility in this mess.
“The CRA opened the door to non-conforming loans. “
If that were true you would have a good point. But Wall Street investment banks learned of the high yields to be made in subprime lending by studying early hard money practitioners like Aames Home Loans and Household Finance. Aames and HFC long predated the CRA and were wholly independent of it. Wall Street took over that market and vastly expanded it. It provided tremendous profits while it lasted. CRA loans were in fact conforming loans, which made them far lower yielding than the non-conforming loans that were the invention of Wall Street.
“I don’t club Dems because it’s convenient,”
I didn’t have you in mind. I was thinking of some celebrity commentators who try to reduce every issue to mere politics. The credit collapse was largely the result of innovations in the credit and derivatives markets, which had little to do with politics. The politics that were involved were bipartisan efforts that removed regulations such as Glass-Steagall and reserve requirements.