No Sympathy

Where's the Outrage at the Banks?

Your anger (outrage) is misplaced. The banks, who by the way are not traditionally mortgage lenders, sold and securitized mortgages because they did not want the risk in the first place. Remember the savings and loan mess? It wasn't the "banks" that failed it was the mortgage lenders. When the S&Ls were gone our government pushed the banks into mortgage lending thru such programs as the Community Reinvestment Act Program (CRAP) or they face the wrath of regulators. So our Government sets up programs such as Fannie and Freddie so that the banks can offload the risk that they didn't want in the fist place. The FDIC, OCC, State Banking regulators, and Federal Reserve inspectors and regulators were more likely to criticize a bank for Not making a bad loan than making one. I once, as a bank director, was chastised by the Federal Reserve for denying a mortgage loan to a young lady who had lost her employment after the application was and home purchase contract was signed. She was actually relieved and thankfully for the denial because since she had lost her employment she had no income to pay the mortgage on a home that she didn't now want. So the bank avoided a potentially bad loan, the customer was happy, but the Regulators were upset and criticized the bank and accused us of sex discrimination and that we might be in violation of the CRAP laws. Our government pushed the banks into mortgage banking after they pushed the S&L industry over the cliff.
We were encouraged to make bad loans and then push them on to others to avoid the risk and to avoid the wrath of the regulators. In other words the Banks did exactly what they were told to do by the government or be put out of business by the government. So save your wrath and outrage for Barney Frank who is still pushing banks to keep making bad loans. Oh by the way that young lady who was denied a loan... She is now my wife.