UN to open 'probe' on US housing crisis

[mookiemookie]

Originally Posted by Platapus

The question would be how many of these "bad" loans were made by institutions not regulated by CRA?

75%. Many of these loans were made by mortgage brokers not covered by the CRA:

http://www.ritholtz.com/blog/wp-cont...chartg1109.gif

Furthermore, if CRA was to blame, you would have expected to see the largest housing bubbles in big time CRA areas like Harlem, the south side of Chicago, Washington DC. This was not the case. Tony areas like Miami, Phoenix and Southern CA are where real estate skyrocketed and foreclosures have hit hardest.

And what you say is true: read the CRA law and you'll see its not about forcing banks to make loans they otherwise wouldn't - just the opposite: it's about forcing banks not to reject loans they otherwise would make. This is what I do for a living and I've given presentations to professional societies and seminars on this. I like to take the printout of the CRA law (its only 7 pages) and offer someone $20 if they can point out anywhere in it that there are quotas or hard numbers in it. So far no one has gotten my $20.