Quote:No those banks made the bad investments BECAUSE they new they where insured by the feds. Had the feds not guaranteed those loans through Fannie Mae and Freddie Mack most of those loans would have NEVER been granted. The banks knew people where going to default but didn't care because the government guaranteed they didn't take the loss. 

 

Here's the real messed up part, the Feds created a risk free situation for mortgage companies to create sub prime loans. The banks of course jumped at the chance for essentially risk free money, they even created predatory loans to take advantage of tax payers that had no knowledge of the mortgage lending process. Then when the bubble popped, the Feds bailed out all those bad loans and the banks kept possession of all the properties. 

 

Who got screwed? The tax payers, we funded the banking take over of countless properties and then essentially paid for it twice, that's what happens when you insert the power of the government with the greed of banks.