Why do people continue to believe that banks were forced to make bad mortgage loans?

Deal Score0

This is the statement I hear ignorant people on this post machen.Die banks are not obliged to make bad loans. They did it on their own will, for the creative financing technique called ARC Verbriefung.Wenn it a very small part spoke of the image.

12 Comments
  1. Reply
    DAR
    May 16, 2011 at 10:09 pm

    THe CRA was a key part of the picture, actually. And as for the rest, it is the federal reserve fixing interest rates so low the resulting free money to wall street had to find a bubble to build. The CRA and Fannie Freddie guarantees just guaranteed that that bubble would be in housing.

  2. Reply
    Albert
    May 16, 2011 at 10:53 pm

    Do some research kid. Our current problem was caused by several poor policy mistakes all of which started with the Community Reinvestment Act. Along with the Home Mortgage Disclosure Act, Federal Housing Enterprises Financial Safety and Soundness Act, and the Community Development Financial Institutions Fund all led to the banks being forced to give out sub-prime loans to people who could never afford to pay them back. All of this led to the banks losing more money than they were gaining and before you knew it, the banks faced bankruptcy – while the lack of loans and the large amount of foreclosures destroyed the housing market…

  3. Reply
    John W
    May 16, 2011 at 10:58 pm

    I think you will find BArney Frank and Obama getting money from them

  4. Reply
    IceT
    May 16, 2011 at 11:34 pm

    They were by the CRA which was signed by Carter, made stronger my Clinton and which Acorn used to blackmail banks into giving loans to people who could not ever qualify or pay them back! You can deny it all you want but that is exactly what happened!

  5. Reply
    BURN IT!
    May 17, 2011 at 12:27 am

    Stop making sense!

    Even if they WERE, people, NO ONE forced them to make Collateralized Mortgage Obligations, or Credit Default Swaps. THAT is what almost collapsed the World Economy: what Warren Buffet referred to as “Financial Instruments of Mass Destruction.”

    “Bad mortages for lazy poor people who had no intention of repaying” is the right-wing excuse. Mighty creative of them to figure out how to blame POOR people for what rich Wall Street cokeheads did.

  6. Reply
    J
    May 17, 2011 at 1:24 am

    Not true. Bush’s economic policies actually encouraged it.

  7. Reply
    Anthony (End the fed!)
    May 17, 2011 at 1:48 am

    The whole problem with our banking system is the federal reserve.

    It sets interest rates way too low compared to what market forces would and a bubble forms. Our banking system also creates false wealth through fractional banking.

    Those are all regulations done by the federal reserve. The free market would not have let the bubble form in the first place. Market forces always prevail, which is why we have a boom-bust cycle. We need to abolish the federal reserve.

  8. Reply
    FlyOnTheWall
    May 17, 2011 at 2:17 am

    The banks weren’t stupid. They passed the risk off to some other investors. Then that group passed the risk off to yet another group of investors. All were hoping to make big profits and they did while the getting was good. But like a hot air balloon, it fell quickly. Then the stock market fell like a house of cards. What a mess these guys got us into.

  9. Reply
    Concerned
    May 17, 2011 at 3:06 am

    You are ignoring the facts and making the ignorant statement

  10. Reply
    Politi-Core
    May 17, 2011 at 3:53 am

    You are correct sir. Banks were NOT forced to make bad loans, They jumped at the chance to hand them out. They purposefully designed these loans to make people default on them. That way they could foreclose on the properties and make out like bandits. They also used predatory lending on seniors who had already paid off their mortgages. They used complicated contracts to confuse potential buyers into signing away their nest egg. Then they were bailed out. Shameful.

  11. Reply
    Smart Kat
    May 17, 2011 at 4:40 am

    CRA was just part of the equation. But it was a significant part of the equation. Another part is the repeal of Glass Stegal. Now that is a bipartisan mistake. The Republicans pushed for it and Clinton signed it into law. It was a big factor as well.

    So the mortgage crisis was cause by bipartisan incompetence.

    Feel better now?

    Leave a reply

    Register New Account
    Reset Password