[quote=SteamWake]
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Originally Posted by mookiemookie
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Originally Posted by SteamWake
Funny. Having read that, as well as being familiar with the CRA as it's my job, I don't see anything in it that required banks to not verify income or payment history of mortgage applicants.
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That all came later during the Clinton Admin. In fact the banks were 'pressured' to do so.
In fact that is in large part what caused this whole freakin mess.
I'll be the first to admit the following administrations did nothing to improve things. |
I'm still not sure as to how the CRA is to blame as the CRA doesn't mandate anything except that banks use the same lending standards in every neighborhood that it does business in. If a bank lowers lending standards, it has to do it across the board. There's nothing that says the lending standards in one neighborhood have to be easier than the rest.
80 something percent of subprime loans were made by institutions not subject to the CRA. It matters not how harsh or easy the CRA was, as these mortgage originators could, and did, do what they wanted so long as Wall Street had an appetite for mortgage debt. So how can you blame CRA when a large majority of the bad debt in the credit crisis was not a result of it?
And furthermore, default rates on loans originated under CRA lenders are lower than non-CRA originators.
I am still baffled as to how people can blame the CRA when it flies in the face of facts and reality.