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<blockquote data-quote="mugsy" data-source="post: 1846930" data-attributes="member: 18914"><p>What you are describing isn&#039;t the whole picture - just part of it.&nbsp; First of all if the the Feds hadn&#039;t guaranteed shaky loans they would have been unacceptably risky to legitimate banks - so they were at least enabled.&nbsp; However, in addition to enabling - the Feds pressured banks by implying, in some cases stating , that failure to make enough loans among certain favored demographics (typically lower income minorities)would be prima facie evidence of &quot;insensitivity&quot;, or worse, toward minorities.&nbsp; Trust me, if Federal regulators or legislators say that you may be flirting with racism - and subject to all of the trouble that might attend to that - you will alter your policies especially if the &quot;carrot&quot; of a loan interest guarantee is attached to the pressure.&nbsp; Classic carrot and stick, followed by opportunist bankers/lenders playing along to get along and milking the system.</p></blockquote><p></p>

[QUOTE="mugsy, post: 1846930, member: 18914"] What you are describing isn't the whole picture - just part of it. First of all if the the Feds hadn't guaranteed shaky loans they would have been unacceptably risky to legitimate banks - so they were at least enabled. However, in addition to enabling - the Feds pressured banks by implying, in some cases stating , that failure to make enough loans among certain favored demographics (typically lower income minorities)would be prima facie evidence of "insensitivity", or worse, toward minorities. Trust me, if Federal regulators or legislators say that you may be flirting with racism - and subject to all of the trouble that might attend to that - you will alter your policies especially if the "carrot" of a loan interest guarantee is attached to the pressure. Classic carrot and stick, followed by opportunist bankers/lenders playing along to get along and milking the system. [/QUOTE]

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