What I remember is, one aspect of S & L Crisis was its origin in liberalization of S & Ls charter to diversify outside of traditional home loans. This made them jump into commercial real estate and construction loan business which they did not understand well. Commercial RE is more cyclical and the cycles are deeper than traditional home mortgages due to absence of psychological and emotional ownership and the lack of sense of failure. This made S & Ls sitting ducks to phony developers who took out large loans with speculative intent (If I win, I will pay back; If I lose, I will walk attitude). Of course, many unscrupulous developers were hand in glove with corrupt S & L owners and conspired to loot the S & Ls right away.
