Kathy all banks didn't participate in such lending practices. I'm sure those are the same ones that would fill the void if we let them fail. How can freetrade ever work if we never allow the big boys to fail? I find it very hard to beleave that these banks didn't lobby for this bill in congress.
they did not. you can go back and look at the congressional hearings that were held when the banks were threatened because they were "red lining" and not lending to poor people. there were congress members who even said that some loans would fail, but it was the right thing to do. after all, everyone deserves to be able to buy a house.
i don't believe that this was applied to every single bank. it was applied to the bigger banks. you'd have to go back and look at both the Community Reinvestment Act of '94 (i think) and the hearings. you can also go back and look at the original act which i believe was in '77.
that's why the banks were told that they would be backed by Fannie and Freddy.
whatever you think about banks, they are a business. making loans to people who can't pay, is bad business. because they were forced to make those loans, they came up with creative ways to dump the loans.
while this was a disaster for all of us, it was not illegal. even if you make the argument that it was immoral, the problem still started with the government interfering with business.
what a lot of people don't know, and i didn't, is that many banks manage loans that they do not own. my bank manages my loan, but they do not own my loan.