We should not be surprised t learn that both Rep Barney Frank and Cal PERS can be mentioned as predatory lenders.
Frank ran interference for government sponsored enterprises like Fannie Mae and Freddie Mac, and the FHA. According to an Wall Street Journal article,
Fannie and Freddie were subject to “affordable housing” regulations, issued by the Department of Housing and Urban Development (HUD), which required them to buy mortgages made to home buyers who were at or below the median income. This quota began at 30% of all purchases in the early 1990s, and was gradually ratcheted up until it called for 55% of all mortgage purchases to be “affordable” in 2007, including 25% that had to be made to low-income home buyers.
More close to home see a recent protest against CalPERS own predatory lending practices in East Palo Alto. (See PDF below)
So when you look at the default rates of more than 20% on guaranteed loans from 2007 and 2008 loans don’t just point fingers at “greedy” bankers. Take a look at government’s and behemoth union pension scams in the financial crisis and its efforts to achieve social purposes by distorting the financial system and its own greed for power.