Actually yes. Andrew Cuomo, then HUD secretary for Clinton sued the banks for discrimination in lending and the settlement was that the banks would be forced to make bad loans.
So your theory is that hundreds of banks, which have developed complex risk algorithms for hundreds of years, suddenly all just decided to start lending to broke people without requiring collateral or proof of income?https://twitter.com/Keller204_1/status/1078871580070031362 …
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Why would you care about the quality of the loan when you can always sell to the biggest player in the market, Fannie & Freddie
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Arnold Kling does an excellent job explaining this subject. It’s worth a listen:http://www.econtalk.org/kling-on-freddie-and-fannie-and-the-recent-history-of-the-u-s-housing-market/?highlight=%5B%22arnold%22,%22kling%22%5D …
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Not suddenly, but many banks were happy to make very risky mortgage loans knowing the ratings agencies would deem them AAA, and then the banks could sell them off in the huge secondary market for mortgage-backed securities, thus getting these loans off their own books quickly.
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Subscribe to Pewdiepie.
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Obama’s DOJ was aggressively going after lenders small and large for “discrimination” thru 2016. Also look up programs for targeted census tracts... risky lending is still being forced on banks.
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Yes pretty much that under government directives to extend housing loans to low income and low asset people.
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Let's not forget Fannie and Freddie offering to take those risky mortgages off the banks' hands too. Fannie and Freddy bundled many of those bad loans and marked up the ratings to AA & AAA. While carrying a Debt : Asset ratio everyone knew was unsustainable.
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algorithms for hundreds of years of risk by banks that did not succumb to greed formula suddenly, for the first time in history the model fell apart because they failed by appealing to PC diversity advocates for socialism of diversity and housing?
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Here is a smoking gun on: Cuomo admits that there will be greater risk (lending to unqualified candidates for mortgages) and a greater default rate: The affirmative action for mortgages was both income and race based:https://www.youtube.com/watch?v=6JPraGHh-rM …
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Yep... and they’re doing it again with mortgages.
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I am pretty sure that's what happened. I own three homes that I would never be able to buy today. 2 were "no doc" loans. I still laugh that I was approved.
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Hundreds of banks realized that they could lend to anyone and sell the loans so fast that they were only exposed to the risk for a few days.
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Franklin Raines and Jamie Goerlick were the primary perps. And after that fiasco was over and Fannie had been bailed out with taxpayer $$s, Obama was ready to make Goerlick head of the FBI at one point. https://www.cnsnews.com/news/article/former-clinton-official-paid-26-million-fannie-mae-taxpayer-bailout-now-obama-shortlist …
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um... Frank/Todd
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2/ As the comments here illustrate, it is a leap to lay the blame for the crash on regs designed to promote minority loans. In the final analysis it was more like a complete failure of regulation.
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That much is not a theory. That is a fact of the 2008 housing bubble (that hundreds of banks started lending to high-risk individuals). The unstated implicit "for no reason" is a straw man. The cause should be rationally debated: SM: reverse racism, Others: Deregulation. go!
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