CRA regulated low income loans only made up about 6% of the market. The vast majority of foreclosure were from "middle classs" areas.
In 1999, Glass-Stegall was repealed. It deregulated the banks. Once they were deregualted, sub-prime loans went from like 5% of the markets, to about 40%. During the time leading up to the crisis, the GOP was in control, and they were far from making threats to regulate the banks. If anything, they working on deregulating the banks, even more.
The private sector gambled on the subprime market, and lost. It's just that simple. The banks who wrote those loans failed on their own. Many of the instutions writing sub-prime loans, like Countrywide, weren't even banks. The private sector is not perfect. Everytime the private sector fails, some people contantly look for ways to blame the government.
The banks got what they wanted, when Glass-Stegall was repealed. They got deregulated, and went crazy. They made alot of money on those high interest loans for a while. But eventually, they got burned. No one is to blame but the banks themselves. Its one thing to offer subprime loans as part of your business. But when the bulk of you r business is sub-prime, you're going to eventually get burned.
Re: Hmmm........
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