1) Before 1995 home loans were made to people that could make the mortgage payments. In these lawsuits, ACORN makes a bogus claim of Redlining (denying poor people loans because of their ethnic heritage). They protest and get the local media to raise a big stink. This stink means that the bank faces thousands of people closing their accounts and get local politicians to lobby to stop the bank from doing some future business, expansions and mergers. ACORN filed tons of these lawsuits and ALL of them allege racism. UPDATED: Obama Sued Citibank Under CRA to Force it to Make Bad Loans | Media Circus 2) Because of ACORN/Obama/ we had Community Reinvestment Act. NOW subprime loans, toxic loans, unqualified borrowers were lent money! 3) BUT these same banks that were FORCED to make the loans the banks KNEW would default were also FORCED by FDIC auditors to justify the bad loan portfolio or be forced CLOSED by the FDIC! 4) Now recognizing the Damoclesian Danger i.e. Bank lender forced by LAW to make BAD loans or Forced to close by the FDIC because of bad loans banks looked to congress! 5) Fannie/Freddie buys these toxic loans and repackages them as securitized assets BACKED by the Federal Government to any investor that buys them! Proof? Oct. 23,2008 (Bloomberg) -- Fannie Mae and Freddie Mac have an ``effective'' federal guarantee, not the "full faith and credit'' of the U.S. government, Federal Housing Finance Agency Director James Lockhart said after the hearing. That does give them effectively a guarantee of the U.S. government.'' Lockhart's Fannie, Freddie Guarantee Remarks Stir Up Confusion - Bloomberg Giving bad loans that will default by the borrowers BUT guaranteed not to fail by the U.S.government.. who's fault that we have a $14 trillion national debt!