question for the libs on here

[Clark Addison]

Originally Posted by FMCoug

I'd love to see data to substantiate that.

But before we gett to far afield into redlining, the premise of my post is that the government forcing banks to make risky loans is what started this. Agree or not?

I'm not smart enough to say what exactly the cause of all of this is, but I am also not dumb enough to lay all the blame on one thing. I've worked at Banks for about 8 years, all in consumer lending, and while the government gives us a lot of direction and regulations, they've never forced us to make bad loans. The marketing and sales people try to make us do that a lot more than the government.

My opinion is that the massive growth in the mortgage CDO market did a whole lot more to cause this than the government (and the fault that the government has is not in getting rid of redlining). Large investors (pushed by investment houses) created a huge demand for CDOs, the investment houses pushed that demand down to the consumer banks and mortgage brokers, who sold a bunch of loans to people who couldn't afford them (who are also not faultless in this). The brokers who made these loans were motivated much more, IMO, by the fact that they could make a lot of money selling them than they were by the government hoding a gun to their heads.