General Discussion
In reply to the discussion: The First Bank Has Been Criminally Indicted for Mortgage Fraud [View all]ljm2002
(10,751 posts)...and Goldman Sachs as well.
I know nothing of PNC. I do know that the housing bubble and subsequent crash is routinely blamed on the people who took out loans they couldn't possibly pay back. But the thing is, they were encouraged to do so, the American Dream of home ownership was dangled in front of them, the lenders instigated the lies and in some cases actually forged the signatures of the borrowers -- all the while telling the borrowers don't worry, you can handle this.
Now were there some corrupt borrowers? Of course. But as William Black has pointed out time and time again, such an overwhelming amount of bad paper could only have occurred if the abuse was systematic, and perpetrated by the lenders. Because had they been following what used to be routine lending practices, it would never have reached such a pass.
Human nature is human nature. It's all about the incentives. Once banks realized they could churn out loans, then turn right around and sell those loans, thus doing away with any risk to their own balance sheets -- they took every opportunity to write loans, whether good, bad or indifferent. It didn't matter to them: once the loan was sold, it was off their books, replaced by nice sweet cash to add to their balance sheets.
Among other things, Goldman Sachs has been in the forefront of those lobbying for no or extremely minimal banking regulations.