Community Reinvestment Act

Discussion in 'Current Events' started by KMAN, Sep 30, 2008.

  1. KMAN
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    KMAN Senior Member

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  2. dilloduck
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    dilloduck Diamond Member

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  3. Truthmatters
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    Truthmatters BANNED

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    Community Reinvestment Act - Wikipedia, the free encyclopedia


    Center for American Progress fellow Robert Gordon[19] noted that approximately half of the subprime loans were made by independent mortgage companies that were not regulated by the CRA and thus had no government obligation to offer credit to minorities. In the later part of the crisis, these mortgage companies made subprime loans at twice the rate of CRA banks. Another third of the major subprime lenders were regulated but had very little CRA involvement.[20] Gordon also makes the argument that the weakening of the CRA in 2004 was followed by intensified subprime lending.[20] Austrian economist Thomas DiLorenzo counters Gordon's statistic by arguing that even if half of the subprime loans were made by non-CRA companies, the CRA had still caused tens of billions in defaults on mortgages by unqualified borrowers. He further states that Gordon's statistic ignores that independent mortgage companies are middlemen who sell subprime loans to banks that are in turn regulated by the CRA.[21]

    Ellen Seidman, former director of the US Office of Thrift Supervision during the Clinton administration, who also works at the New America Foundation,[22] has stated her belief that the CRA did not have an effect on the United States housing bubble.[23] She observes that CRA banks were particularly warned to make responsible investments, citing one of her own speeches as an example.[24]


    [edit] References
     
  4. Ravi
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    Ravi Diamond Member

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    KMAN, why don't you tell us in your own words why you think this is true.

    Or you, Dillo, why don't you tell us?

    I keep waiting for some Republican to find a poor black family and make them the poster boy for the meltdown of the economy.

    "Do you know that Leroy and Shawana Brown are single-handedly responsible for the 700 billion shortfall in the mortgage backed securities market? Is this what you want your country to stand for? Vote for McCain/Palin and the bankers and Wall Street will be vindicated. I'm John McCain and I approve this message."
     
  5. NOBama
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    NOBama Senior Member

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    Why would you say such a thing? Are you implying that this mess is a matter of racial discrimination?
     
  6. editec
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    editec Mr. Forgot-it-All

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    You don't know what the fuck you're talking about, KMAN.
     
  7. HoleInTheVoid
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    HoleInTheVoid Active Member

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    care4all says that 75% of the loans defaulted on in the last 5 years were not CRA loans. That conversation hasn't concluded yet so, we'll see how it develops but in the meantime I'll accept the statement at face value.

    OK, but then we must ask: how much does CRA account for the writing of mortages.

    If, for example, they only comprise 5% of mortgages but account for 25% of the defaults that means a CRA is 5 times more likely to default. Again, my 5% figure is just a hypothetical.

    But if CRA loans are above average defaulters it is not racist to say CRA laons are a bad idea if the lion's share of CRA loans are written to minorities. Facts are race neutral and wishing the GOP were racists does nothing but reinforce the petty bigotry in your mind that you're projecting onto the GOP.
     
  8. RetiredGySgt
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    RetiredGySgt Platinum Member

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    You are a fucking idiot. If you can not see how MILLIONS of bad loans caused this you are not worth the time to talk to. Loans created because Government encouraged and then threatened Banks into making them. Legislation from Carter and Clinton.

    Obama has as HIS financial advisor one of the people that CREATED this mess, Raines was booted out of his position because HE o'ked bad loans AND ok'ed bad reporting of said loans to cover them up.

    Yup great guy to advise Obama on how to deal with a crisis he HELPED create.

    McCain in 2005 tried to solve this problem and the Democrats opposed it. Bush in 2003 tried to fix this problem before it happened and again the Democrats stopped it. The same democrats now claiming with a straight face they had nothing to do with this problem.
     
  9. Ravi
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    Ravi Diamond Member

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    Show me.
     
  10. Ravi
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    Ravi Diamond Member

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    You obviously don't know the answer to your questions and yet you are perfectly happy blaming this entire mess on CRAs.

    Why?
     

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