Not sure you’ll see this as Medium posts the response under my original question, not your reply.
I refer to pressure to treat lower income loans as contributions to both potential political friends who controlled voting blocks, whether community activists like ACORN (requirement to get them to leave you alone was contributing $50,000), or making a disproportionate number of these loans through inner city brokers (who drastically overcharged the locals), always backed by Fannie.
Fannie’s relationship to politics is well documented, and their CEOs were the highest paid chiefs in the business world (Johnson and Raines tenures) during the period of improper activity.
I served on a bank board during 00–08. During this time we were audited by the Fed, as all major banks, and our portfolio was scrutinized top to bottom. Each board meeting would provide a review of the Fed’s findings. In no period was our low-income loan activity mentioned. We were frequently penalized for insufficient loans under the CRA (community reinvestment act).
I do not have insight into the private mortgage activity but I do know we were seeing this at the market level, amazed the regulators weren’t doing anything, and the result was behavior mirroring due to improper regulation. It is analogous to regulating gun stores but not gun shows.
This article, somewhat analogous to my comments, was an interview with a banker who came through the war unharmed but saw the problems realistically.