If you want a rabbit hole on the "housing crisis" you need to look no further than the CRA (community reinvestment act) and how it forced banks to make bad loans.
It forced banks to take on risky loans, or else risk losing their FDA accreditation (insurance).
Once you hold a gun to a banks head and tell them they have to make this loan "or else", they then bundle all that dirty paper and shuffle it off to 3rd party lenders to wash their hands of the risk.
They take a small loss instead of a large one.
It's risk mitigation.
When the ARM's flexed, and payments went up and people all owed more money on their homes than they were worth... everyone defaulted on the loans.
I'm no fan of George Bush jr, but credit where credit is due... he went in front of that fat blubbering piece of shit Barney Frank and that commie Frank Dodd and told them that what they were doing with the CRA and Fannie and Freddie was going to destroy the housing market and cause a financial disaster.
If you want a rabbit hole on the "housing crisis" you need to look no further than the CRA (community reinvestment act) and how it forced banks to make bad loans.
It forced banks to take on risky loans, or else risk losing their FDA accreditation (insurance).
Once you hold a gun to a banks head and tell them they have to make this loan "or else", they then bundle all that dirty paper and shuffle it off to 3rd party lenders to wash their hands of the risk.
They take a small loss instead of a large one.
It's risk mitigation.
When the ARM's flexed, and payments went up and people all owed more money on their homes than they were worth... everyone defaulted on the loans.
I'm no fan of George Bush jr, but credit where credit is due... he went in front of that fat blubbering piece of shit Barney Frank and that commie Frank Dodd and told them that what they were doing with the CRA and Fannie and Freddie was going to destroy the housing market and cause a financial disaster.
Timeline shows Bush, McCain warning Dems of financial and housing crisis; meltdown https://youtu.be/cMnSp4qEXNM
They called him racist for trying to fix it.
Sure but the CRA is intentionally designed to force banks to make risky loans to people with shit credit.
They knew exactly what was going to happen.
It was done on purpose.
This will never happen.
It already happens.
So u know people w/ zero credit that aren't minors and have credit cards that aren't prepaid and or carry a significant balance?
Of course, but this is nothing new nor a credit line of any significance. Predatory lending?