How typical of conservatives!

First, home loan failures from the CRA were a small part of the problem. The CRA goals were necessary and laudable to address decades of bigotry in red-lining.

Fannie Mae and Freddie Mac did their jobs as required. Their purpose was to take on loans from banks to free up bank capital to tend to new prospective homeowners.

You briefly, all TOO briefly, touch on Wall St, collateralized debt obligations and the finance industry. The fact is that every economic crash and crisis in this country has always been caused by speculators in the financial sector.

Let’s drill down. Suppose Tom & Mary got a loan from Boise Bank and bought a house. If Boise Bank kept the loan on books and Tom had financial difficulties he could go to the bank for forbearance, loan adjustment or some other assistance so he could still stay in the house and make payments.

Or- Boise offloads the loan to Fannie Mae. Tom could contact Fannie for the same.

But if Tom’s loan is bundled into a package financial instrument and sold to a hedge funder or some other entity ? Now who does Tom call? There is no one to call because no single entity now holds his loan!

It is amazing that conservatives bleat on about moral hazard for individuals while they let (and absolve) corporations from profligate behavior and even write off the losses that corporate management opts to undertake. Well it wasn’t like the CEO lost his own money was i