I’m no fan of Clinton, but if the government told me that I had to lend money to people that had NO CHANCE OF EVER PAYING IT BACK, I would tell the government to take a hike and throw me in jail.
But Countrywide and the other banks just saw HUGE REVENUE while the gravy train was running and could not GIVE A DAMN about the crash that was certain to happen.
It didn’t take a genius to figure out what was going on, it only took a quick comparison of average incomes versus average prices of houses being sold. Additionally, ANYONE WITH ACCESS could have pulled the paper for some of the loans and compared loan amounts to verified income levels (at least for the loads that they bothered to check income levels on, which were not many at the end) and it was NOT HARD to see what was going on, not hard at all. I even bought a nice car by shorting Countrywide and a few other IDIOT lenders back then - the only time I’ve ever made money in stocks, by the way.
They weren’t just told to make the bad loans. They were told they couldn’t make good loans if they didn’t make the bad loans, in an environment where the price of their collateral was going up faster than the rate of default. They also couldn’t buy sell, or merge with other companies.