NYcarbineer
Diamond Member
Has any Federal legislation ever required banks to NOT verify income or payment history of mortgage applicants?
Did the FHA force Moody's, S&P, and Fitch to rate junk paper as Triple AAA?
What arm of "Gubmint" required "No Money Down" mortgages?
The housing bubble formed because big business (Wall Street) and big government (Republicans AND Democrats) knew how to socialize cost and privatize profit.
And they are still at it while we argue about big vs little government or the distinctions without differences between Republicans AND Democrats.
The Boston Fed wrote a paper that said banks should disregard standard credit worthiness criteria for low income minorities. The regulatory bodies then used that as a hammer to deny charters for banks that did not comply.
And so credit standards for everyone ended up being eliminated.
Low income minorities did not cause the mortgage crisis.