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ThebigLMAOski17 2 points ago +2 / -0

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.

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pkvi [S] 0 points ago +1 / -1

This goes back further to the 70's and 80's with housing programs "pushing" banks to lend allowing for inflation to modify the economy how they wanted.

Ayh say "pushing" despite in reality many banks wanting to lend so they can take land on foreclosures and reap federal rewards for it.

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ThebigLMAOski17 2 points ago +2 / -0

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.