One of the most constantly whined refrains out of the economic crisis that banks were forced to make bad loans to low income groups because of federal regulations requiring them to loan money to minorities.
That’s hooey, of course. And even this story won’t convince those who really want to believe that the housing crisis was the result of some liberal plot.
Still, here’s the story in today’s (click) Washington Post: A Wells Fargo executive describing in detail how she led the team that eagerly sought out minorities and people with bad credit or no credit and hoodwinked them into loans they couldn’t handle.
She was making loans people couldn’t pay under the certainty that she would make her loan fees while the loans themselves would be sold and resold. She was one cog in a giant machine that was spinning out money as the housing hyper-inflationary bubble inflated. It was a great scam while it lasted, but the result is the mess you see around you.
The bank is denying this lady’s assertions, but they ring too true. One of the editors here at the paper was trying to buy a house at one price and was dealing with mortgage brokers who really tried hard to get him into a much bigger house, assuring him that it would be no problem. Instances of outright falsifying of loan documents are rife.
And yet some people still say it’s the fault of the liberals for forcing banks to make bad loans?
Cripes, some people will believe anything.