Originally Posted by
mikestorm Banks transitioned from an illegal practice (redlining) to a morally ambiguous practice (gouging the un and under educated). Also, you're off base in your logic; banks weren't told to start lending to people who couldn't pay the money back. Banks were told to stop ignoring minorities as a matter of course due to their discriminatory assumption that they couldn't pay the money back. There is a disctinction.
A combination of they got greedy and they drank their own Kool-Aid. They kept lowering the 'customer exposure' bar (100% LTV loans, interest only loans, etc.) and jacked up the collected fees/ rates that enabled customers to take advantage of these programs. Then, when customers started to walk away from their loan obligations, claiming they were taken advantage of, the banks shrugged their shoulders as of to say "How did this happen?" and started to look for a handout.
Don't misunderstand, I don't consider these people (the customers) victims, and if I gave that impression I apologize. I'm angry as **** that "government" (read: taxpayer) money was used to bail out the financial institutions you mentioned. Personally, I think equal blame should be shared between the banks and the morons that signed on the dotted line. My previous post was in response to someone claiming the GOVERNMENT was to blame for this mess due to legislation passed in the mid nineties.
That's scary, but I would like to point out the projections are rooted in a trend that started in 2003.