The community reinvestment act forced banks to make high risk loans because the architects of it said banks were discriminating against the poor by denying high risk loans. Should banks be allowed to deny loans to people they deem high risk?
The short answer is yes but then there is the rest of the story. The banks took no risk because they bundled the loans and resold them, with the help of our credit industry, as good, solid, no risk loans to pension plans. We took the hit not banks!
People like that far left couple the sandlers got away with defrauding people out of billions but we had more banks collapse because of the forced loans anytime in American history and since Government run Freddie Mac and fanny Mae had the....
I must respectfully disagree. The combination of a rampant housing bubble and very lax regulations in our financial institutions caused the collapse. Banks, financial institutions, hedge funds and credit agencies made literally billions of dollars.
The government forcing the banks to make high risk loans led to the collapse, if the government regulation had not forced banks to do that there would have never been a collapse.
For the last time, the banks took no risk whatsoever because they did not hold the loans. They made money off these loans and passed the risk on to others. Credit agencies were criminal in their actions by intentionally +rating these bundled loans.
I won't add much to this argument. However, I did work for the mortgage industry when this collapse hit. First of all, they saw it coming. Secondly, The ones that made the high-risk loans were mortgage companies. Most of them went under when this..
collapse happened. Housing prices were inflated way beyond what they were worth. The banks paid the price for those failed loans. They couldn't possibly sell them all off. Because the banks can't fail, taxpayers did pay the price.
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