For All Those Who Continue To Deny Clinton's Surpluses

[Cammmpbell]

From the congressional record:


H.RES.490 -- Save Our Surplus for Debt Reduction and Tax Rebate Resolution of 2000

HRES 490

106th CONGRESS

To ensure that the fiscal year 2000 on-budget surplus is used to reduce publicly-held debt and provide tax relief to American taxpayers.
IN THE HOUSE OF REPRESENTATIVES
May 4, 2000
Mr. WELDON of Florida (for himself, Mr. ARMEY, Mr. DELAY, Mr. LARGENT, Mr. COBURN, and Mr. STEARNS) submitted the following resolution:

RESOLUTION

To ensure that the fiscal year 2000 on-budget surplus is used to reduce publicly-held debt and provide tax relief to American taxpayers.
Resolved,

SECTION 1. SHORT TITLE.
This Act may be cited as the `Save Our Surplus for Debt Reduction and Tax Rebate Resolution of 2000'.

SEC. 2. FINDINGS AND PURPOSE.

(a) FINDINGS- Congress finds that--

(1) the Office of Management and Budget estimated in the President's fiscal year 2001 budget submission that the Government will have a $19,000,000,000 nonsocial security surplus (on-budget surplus) in fiscal year 2000;

(2) it is expected that in the summer of 2000, the Office of Management and Budget will estimate an even larger budget surplus for fiscal year 2000;

(3) Government spending in fiscal year 2000 will increase faster than the rate of inflation for a total of over $1,750,000,000,000;

(4) the public debt has been paid down by $51,000,000,000 in fiscal year 1998, $88,000,000,000 in fiscal year 1999, and current estimates are that $163,000,000,000 will be paid down in fiscal year 2000;


AND THEN ALONG CAME GEORGE

 

[ecinicola]

Click here: The Myth of the Clinton Surplus

 

[kyzr]

No one is disputing the Clinton surpluses. Much of it was due to Newt cutting spending as well as the Clinton Tax Rates.

What you need to admit is that the financial collapse was due to the Clinton "Community Reinvestment Act" whereby the dems forced banks to give mortgages to the unqualified, and that led directly to the financial collapse when the dead-beats defaulted on their mortgages.

 

[edthecynic]

No one is disputing the Clinton surpluses. Much of it was due to Newt cutting spending as well as the Clinton Tax Rates.

What you need to admit is that the financial collapse was due to the Clinton "Community Reinvestment Act" whereby the dems forced banks to give mortgages to the unqualified, and that led directly to the financial collapse when the dead-beats defaulted on their mortgages.

Another mindless drone parroting the drivel from GOP hate radio. The CRA had nothing to do with the Bush housing crash. First of all, CRA loans were made to QUALIFIED borrowers. You have it confused with Bush's ADDI, American Dream Downpayment Initiative, that changed the rules to allow no downpayment loans for more than the house was worth to people with bad credit who could not keep up with the payments and who were at least 20% below the standard of living for the neighborhood they were buying into.

Secondly, 80% of the subprime loans were made by institutions who were not subject to CRA standards.

And finally, no bank has ever been forced to comply with government mandates about mortgage lending. There are no government mandates, and there never were. In order to qualify for government-backed deposit insurance, a benefit that banks aren’t forced to accept but enjoy having, the Community Reinvestment Act and similar measures designed to prevent discrimination in lending to qualified individuals, only encourage banks to lend in all of the areas where they do business. And Section 802 (b) of the Act stresses that all loans must be “consistent with safe and sound operations.” The opposite of requiring that lenders write risky mortgages.

 

[Seawytch]

No one is disputing the Clinton surpluses. Much of it was due to Newt cutting spending as well as the Clinton Tax Rates.

What you need to admit is that the financial collapse was due to the Clinton "Community Reinvestment Act" whereby the dems forced banks to give mortgages to the unqualified, and that led directly to the financial collapse when the dead-beats defaulted on their mortgages.

No, actually, we don't need to admit that...since that canard has already been debunked 12 ways to Sunday.

Community Reinvestment Act had nothing to do with subprime crisis

The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits. Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly. But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA. University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations. As former Fed Governor Ned Gramlich said in an August, 2007, speech shortly before he passed away: “In the subprime market where we badly need supervision, a majority of loans are made with very little supervision. It is like a city with a murder law, but no cops on the beat.”

Not surprisingly given the higher degree of supervision, loans made under the CRA program were made in a more responsible way than other subprime loans. CRA loans carried lower rates than other subprime loans and were less likely to end up securitized into the mortgage-backed securities that have caused so many losses, according to a recent study by the law firm Traiger & Hinckley (PDF Here)

 

[healthmyths]

No one is disputing the Clinton surpluses. Much of it was due to Newt cutting spending as well as the Clinton Tax Rates.

What you need to admit is that the financial collapse was due to the Clinton "Community Reinvestment Act" whereby the dems forced banks to give mortgages to the unqualified, and that led directly to the financial collapse when the dead-beats defaulted on their mortgages.

I'm DISPUTING IT!!!
How can you have a surplus when in the Next 30 years the same "Dot.com" bubble busted costing the treasury $166 billion a year in 2002?
FACT:

Clinton CAUSED $ 5 trillion alone in lost market value
The Stock Market Crash of 2000-2002 caused the loss of $5 trillion in the market value of companies from March 2000 to October 2002.
Dot-com bubble - Wikipedia, the free encyclopedia

 

[kyzr]

No one is disputing the Clinton surpluses. Much of it was due to Newt cutting spending as well as the Clinton Tax Rates.

What you need to admit is that the financial collapse was due to the Clinton "Community Reinvestment Act" whereby the dems forced banks to give mortgages to the unqualified, and that led directly to the financial collapse when the dead-beats defaulted on their mortgages.

No, actually, we don't need to admit that...since that canard has already been debunked 12 ways to Sunday.

Community Reinvestment Act had nothing to do with subprime crisis

The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits. Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly. But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA. University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations. As former Fed Governor Ned Gramlich said in an August, 2007, speech shortly before he passed away: “In the subprime market where we badly need supervision, a majority of loans are made with very little supervision. It is like a city with a murder law, but no cops on the beat.”

Not surprisingly given the higher degree of supervision, loans made under the CRA program were made in a more responsible way than other subprime loans. CRA loans carried lower rates than other subprime loans and were less likely to end up securitized into the mortgage-backed securities that have caused so many losses, according to a recent study by the law firm Traiger & Hinckley (PDF Here)

Skip down to the "Government Policies" section, and read between the lines, about "affordable housing" and then read the CRA link that follows
Subprime mortgage crisis - Wikipedia, the free encyclopedia

This is the WSJ's take on the financial crisis causes
How Government Stoked the Mania - WSJ.com


If you have alternate theories as to why we had the financial collapse, please provide credible links. IMHO it was the CRA and those who benefited from Fannie & Freddie...follow the money,

Forbes Explains the causes of the meltdown
A Poisonous Cocktail - Forbes.com

Wiki explains its not the 1977 CRA Law, its the revisions that followed...
Community Reinvestment Act - Wikipedia, the free encyclopedia

 

[kyzr]

No one is disputing the Clinton surpluses. Much of it was due to Newt cutting spending as well as the Clinton Tax Rates.

What you need to admit is that the financial collapse was due to the Clinton "Community Reinvestment Act" whereby the dems forced banks to give mortgages to the unqualified, and that led directly to the financial collapse when the dead-beats defaulted on their mortgages.

Another mindless drone parroting the drivel from GOP hate radio. The CRA had nothing to do with the Bush housing crash. First of all, CRA loans were made to QUALIFIED borrowers. You have it confused with Bush's ADDI, American Dream Downpayment Initiative, that changed the rules to allow no downpayment loans for more than the house was worth to people with bad credit who could not keep up with the payments and who were at least 20% below the standard of living for the neighborhood they were buying into.

Secondly, 80% of the subprime loans were made by institutions who were not subject to CRA standards.

And finally, no bank has ever been forced to comply with government mandates about mortgage lending. There are no government mandates, and there never were. In order to qualify for government-backed deposit insurance, a benefit that banks aren’t forced to accept but enjoy having, the Community Reinvestment Act and similar measures designed to prevent discrimination in lending to qualified individuals, only encourage banks to lend in all of the areas where they do business. And Section 802 (b) of the Act stresses that all loans must be “consistent with safe and sound operations.” The opposite of requiring that lenders write risky mortgages.

Good post, thanks. The ADDI just helped with the down payment up to $10,000. It does not account for all of the bad loans to the unqualified, only the CRA can explain that.

The cause of the financial crisis can be debated. IMHO banks would not lend to unqualified borrowers unless the government forced them to. Just look at Fannie & Freddie and their "donations" to politicians, and you'll see what caused the crash.

 

[kyzr]

No one is disputing the Clinton surpluses. Much of it was due to Newt cutting spending as well as the Clinton Tax Rates.

What you need to admit is that the financial collapse was due to the Clinton "Community Reinvestment Act" whereby the dems forced banks to give mortgages to the unqualified, and that led directly to the financial collapse when the dead-beats defaulted on their mortgages.

I'm DISPUTING IT!!!
How can you have a surplus when in the Next 30 years the same "Dot.com" bubble busted costing the treasury $166 billion a year in 2002?
FACT:

Clinton CAUSED $ 5 trillion alone in lost market value
The Stock Market Crash of 2000-2002 caused the loss of $5 trillion in the market value of companies from March 2000 to October 2002.
Dot-com bubble - Wikipedia, the free encyclopedia

Please scroll down and see the actual surplus at the end of Clinton's 2nd term. The line explodes up during Bush and Obama.
History of the United States public debt - Wikipedia, the free encyclopedia

 

[Seawytch]

It was NOT the CRA. What it was was mixing good mortgages with bad mortgages and NO FUCKING SUPERVISION. People playing with obscene amounts of money do not play fair. They play to get more money and need adult supervision. Regulations were eased, done away with, not funded, ignored...THAT is what led to this goddamn mess, not a few minorities getting houses.

Just another "Welfare Queens in Cadillacs" dog whistle.

 

[tinydancer]

Who was in Congress?

So now you raise your head again do you?

 

[edthecynic]

No one is disputing the Clinton surpluses. Much of it was due to Newt cutting spending as well as the Clinton Tax Rates.

What you need to admit is that the financial collapse was due to the Clinton "Community Reinvestment Act" whereby the dems forced banks to give mortgages to the unqualified, and that led directly to the financial collapse when the dead-beats defaulted on their mortgages.

Another mindless drone parroting the drivel from GOP hate radio. The CRA had nothing to do with the Bush housing crash. First of all, CRA loans were made to QUALIFIED borrowers. You have it confused with Bush's ADDI, American Dream Downpayment Initiative, that changed the rules to allow no downpayment loans for more than the house was worth to people with bad credit who could not keep up with the payments and who were at least 20% below the standard of living for the neighborhood they were buying into.

Secondly, 80% of the subprime loans were made by institutions who were not subject to CRA standards.

And finally, no bank has ever been forced to comply with government mandates about mortgage lending. There are no government mandates, and there never were. In order to qualify for government-backed deposit insurance, a benefit that banks aren’t forced to accept but enjoy having, the Community Reinvestment Act and similar measures designed to prevent discrimination in lending to qualified individuals, only encourage banks to lend in all of the areas where they do business. And Section 802 (b) of the Act stresses that all loans must be “consistent with safe and sound operations.” The opposite of requiring that lenders write risky mortgages.

Good post, thanks. The ADDI just helped with the down payment up to $10,000. It does not account for all of the bad loans to the unqualified, only the CRA can explain that.

The cause of the financial crisis can be debated. IMHO banks would not lend to unqualified borrowers unless the government forced them to. Just look at Fannie & Freddie and their "donations" to politicians, and you'll see what caused the crash.

Again, the CRA loans were to QUALIFIED borrowers. You had to have good credit to get a CRA loan and the adjustable rate went DOWN if the borrower made their payments on time for 2 years, the exact opposite of the ARMs whose rates skyrocketed that were bundled in the high risk high yield derivatives.

Unlike CRA, ADDI made no down payment loans to borrowers with bad credit and for more than the property was worth.

USATODAY.com - Bush seeks to increase minority homeownership
USATODAY.com - Bush seeks to increase minority homeownership

Bush seeks to increase minority homeownership
By Thomas A. Fogarty, USA TODAY

In a bid to boost minority homeownership, President Bush will ask Congress for authority to eliminate the down-payment requirement for Federal Housing Administration loans.

In announcing the plan Monday at a home builders show in Las Vegas, Federal Housing Commissioner John Weicher called the proposal the "most significant FHA initiative in more than a decade." It would lead to 150,000 first-time owners annually, he said.

Nothing-down options are available on the private mortgage market, but, in general, they require the borrower to have pristine credit. Bush's proposed change would extend the nothing-down option to borrowers with blemished credit.

The FHA isn't a direct lender, but guarantees loan payments for mortgages on moderately priced owner-occupied property. The FHA guarantee now permits private lenders to finance as much as 97% of the purchase price of a home for millions of low- and middle-income borrowers.

In the proposal soon to be delivered to Congress, Bush would allow the FHA to guarantee loans for the full purchase price of the home, plus down-payment costs. As a practical matter, the FHA would guarantee mortgages as high as 103% of the value of the underlying property.

 

[kyzr]

It was NOT the CRA. What it was was mixing good mortgages with bad mortgages and NO FUCKING SUPERVISION. People playing with obscene amounts of money do not play fair. They play to get more money and need adult supervision. Regulations were eased, done away with, not funded, ignored...THAT is what led to this goddamn mess, not a few minorities getting houses.
Just another "Welfare Queens in Cadillacs" dog whistle.

Stop with the fucking "dog whistle", its about government forcing socialism on the banking system and investors getting hosed for $14-trillion because the DC moron whores don't understand how anything works.

Did you see Ann Coulter's column today? She makes a few points that can't be disputed...

"A few (race) cards short of a full deck"

skipping down near the end...

"the next night on Hardball" Matthews made his most dramatic announcement yet! It seems the mention of "Chicago" in relation to the president is also racist.

Matthews: "They keep saying Chicago, by the way, you noticed?"

Guest John Heilmann, like an orderly in a mental institution trapped alone with a patient, played along, responding, "well, there's a lot of black people inn Chicago"...while frantically jabbing at the alarm button.

For the love of Pete, can't we all acknowledge that a reference to "Chicago" in this context refers to corrupt, big city, machine politics and 1920s gangsterism, NOT RACE.

 

[Seawytch]

Bush's OWN WORDS...

"A surplus in tax revenue, after all, means that taxpayers have been overcharged.

February 2001 Motherfuckers. He had a goddamn surplus that he pissed away on two unpaid for wars, an unpaid for tax cut (mostly going to the richest among us) and the unpaid for Medicare Part D.

Yup...still Bush's fucking fault.

 

[Seawytch]

It was NOT the CRA. What it was was mixing good mortgages with bad mortgages and NO FUCKING SUPERVISION. People playing with obscene amounts of money do not play fair. They play to get more money and need adult supervision. Regulations were eased, done away with, not funded, ignored...THAT is what led to this goddamn mess, not a few minorities getting houses.
Just another "Welfare Queens in Cadillacs" dog whistle.

Stop with the fucking "dog whistle", its about government forcing socialism on the banking system and investors getting hosed for $14-trillion because the DC moron whores don't understand how anything works.

Did you see Ann Coulter's column today? She makes a few points that can't be disputed...

"A few (race) cards short of a full deck"

skipping down near the end...

"the next night on Hardball" Matthews made his most dramatic announcement yet! It seems the mention of "Chicago" in relation to the president is also racist.

Matthews: "They keep saying Chicago, by the way, you noticed?"

Guest John Heilmann, like an orderly in a mental institution trapped alone with a patient, played along, responding, "well, there's a lot of black people inn Chicago"...while frantically jabbing at the alarm button.

For the love of Pete, can't we all acknowledge that a reference to "Chicago" in this context refers to corrupt, big city, machine politics and 1920s gangsterism, NOT RACE.

Okay, if it's not a dog whistle, what is it? The CRA was not responsible for the housing crash. This has been PROVEN. The fault lies solely with fat cats on Wall Street and the government that wasn't watching them. What do you call shifting the blame to the blameless (who happen to be minorities)?

 

[kyzr]

Another mindless drone parroting the drivel from GOP hate radio. The CRA had nothing to do with the Bush housing crash. First of all, CRA loans were made to QUALIFIED borrowers. You have it confused with Bush's ADDI, American Dream Downpayment Initiative, that changed the rules to allow no downpayment loans for more than the house was worth to people with bad credit who could not keep up with the payments and who were at least 20% below the standard of living for the neighborhood they were buying into.

Secondly, 80% of the subprime loans were made by institutions who were not subject to CRA standards.

And finally, no bank has ever been forced to comply with government mandates about mortgage lending. There are no government mandates, and there never were. In order to qualify for government-backed deposit insurance, a benefit that banks aren’t forced to accept but enjoy having, the Community Reinvestment Act and similar measures designed to prevent discrimination in lending to qualified individuals, only encourage banks to lend in all of the areas where they do business. And Section 802 (b) of the Act stresses that all loans must be “consistent with safe and sound operations.” The opposite of requiring that lenders write risky mortgages.

Good post, thanks. The ADDI just helped with the down payment up to $10,000. It does not account for all of the bad loans to the unqualified, only the CRA can explain that.

The cause of the financial crisis can be debated. IMHO banks would not lend to unqualified borrowers unless the government forced them to. Just look at Fannie & Freddie and their "donations" to politicians, and you'll see what caused the crash.

Again, the CRA loans were to QUALIFIED borrowers. You had to have good credit to get a CRA loan and the adjustable rate went DOWN if the borrower made their payments on time for 2 years, the exact opposite of the ARMs whose rates skyrocketed that were bundled in the high risk high yield derivatives.

Unlike CRA, ADDI made no down payment loans to borrowers with bad credit and for more than the property was worth.

USATODAY.com - Bush seeks to increase minority homeownership
USATODAY.com - Bush seeks to increase minority homeownership

Bush seeks to increase minority homeownership
By Thomas A. Fogarty, USA TODAY

In a bid to boost minority homeownership, President Bush will ask Congress for authority to eliminate the down-payment requirement for Federal Housing Administration loans.

In announcing the plan Monday at a home builders show in Las Vegas, Federal Housing Commissioner John Weicher called the proposal the "most significant FHA initiative in more than a decade." It would lead to 150,000 first-time owners annually, he said.

Nothing-down options are available on the private mortgage market, but, in general, they require the borrower to have pristine credit. Bush's proposed change would extend the nothing-down option to borrowers with blemished credit.

The FHA isn't a direct lender, but guarantees loan payments for mortgages on moderately priced owner-occupied property. The FHA guarantee now permits private lenders to finance as much as 97% of the purchase price of a home for millions of low- and middle-income borrowers.

In the proposal soon to be delivered to Congress, Bush would allow the FHA to guarantee loans for the full purchase price of the home, plus down-payment costs. As a practical matter, the FHA would guarantee mortgages as high as 103% of the value of the underlying property.

Here is the link that disputes your post, this issue could be a super presidential debate question
A Poisonous Cocktail - Forbes.com

"According to the National Community Reinvestment Coalition, in the first 20 years of the act, up to 1997, commitments totaled approximately $200 billion. But from 1997 to 2007, commitments exploded to more than $4.2 trillion. (Keep in mind this is more than four times the size of the current health bill being debated in Congress.) The burdens on individual banks can be enormous. Washington Mutual, for example, pledged $1 trillion in mortgages to those with credit histories that "fall outside typical credit, income or debt constraints," and was awarded the 2003 CRA Community Impact Award for its Community Access program. Four years later it was taken over by the Office of Thrift Supervision. In 2004 Bank of America ( BAC - news - people ) agreed to provide $750 billion in CRA loans to applicants with poor credit who had previous difficulty obtaining a mortgage. By 2008 Bank of America was reporting that CRA loans represented only 7% of its portfolio but 29% of its losses. Numerous large banks are now in the middle of enormous CRA commitments. In 2004 J.P. Morgan Chase ( JPM - news - people ) agreed to provide $800 billion of such loans over the course of 10 years.

For all the talk of unsold condos in Miami and foreclosed McMansions in California, the epicenters of the mortgage crisis are inner-city urban areas--precisely those areas where the CRA was most applicable. As the Boston Federal Reserve put it in a massive 2008 study, "In the current housing crisis foreclosures are highly concentrated in [urban] minority neighborhoods." The study found that borrowers in these areas were seven times more likely to be foreclosed on than the general population. Analysis by the Pew Research Center and another by The New York Times found that mortgage holders in these areas had."

 

[edthecynic]

Good post, thanks. The ADDI just helped with the down payment up to $10,000. It does not account for all of the bad loans to the unqualified, only the CRA can explain that.

The cause of the financial crisis can be debated. IMHO banks would not lend to unqualified borrowers unless the government forced them to. Just look at Fannie & Freddie and their "donations" to politicians, and you'll see what caused the crash.

Again, the CRA loans were to QUALIFIED borrowers. You had to have good credit to get a CRA loan and the adjustable rate went DOWN if the borrower made their payments on time for 2 years, the exact opposite of the ARMs whose rates skyrocketed that were bundled in the high risk high yield derivatives.

Unlike CRA, ADDI made no down payment loans to borrowers with bad credit and for more than the property was worth.

USATODAY.com - Bush seeks to increase minority homeownership
USATODAY.com - Bush seeks to increase minority homeownership

Bush seeks to increase minority homeownership
By Thomas A. Fogarty, USA TODAY

In a bid to boost minority homeownership, President Bush will ask Congress for authority to eliminate the down-payment requirement for Federal Housing Administration loans.

In announcing the plan Monday at a home builders show in Las Vegas, Federal Housing Commissioner John Weicher called the proposal the "most significant FHA initiative in more than a decade." It would lead to 150,000 first-time owners annually, he said.

Nothing-down options are available on the private mortgage market, but, in general, they require the borrower to have pristine credit. Bush's proposed change would extend the nothing-down option to borrowers with blemished credit.

The FHA isn't a direct lender, but guarantees loan payments for mortgages on moderately priced owner-occupied property. The FHA guarantee now permits private lenders to finance as much as 97% of the purchase price of a home for millions of low- and middle-income borrowers.

In the proposal soon to be delivered to Congress, Bush would allow the FHA to guarantee loans for the full purchase price of the home, plus down-payment costs. As a practical matter, the FHA would guarantee mortgages as high as 103% of the value of the underlying property.

Here is the link that disputes your post, this issue could be a super presidential debate question
A Poisonous Cocktail - Forbes.com

"According to the National Community Reinvestment Coalition, in the first 20 years of the act, up to 1997, commitments totaled approximately $200 billion. But from 1997 to 2007, commitments exploded to more than $4.2 trillion. (Keep in mind this is more than four times the size of the current health bill being debated in Congress.) The burdens on individual banks can be enormous. Washington Mutual, for example, pledged $1 trillion in mortgages to those with credit histories that "fall outside typical credit, income or debt constraints," and was awarded the 2003 CRA Community Impact Award for its Community Access program. Four years later it was taken over by the Office of Thrift Supervision. In 2004 Bank of America ( BAC - news - people ) agreed to provide $750 billion in CRA loans to applicants with poor credit who had previous difficulty obtaining a mortgage. By 2008 Bank of America was reporting that CRA loans represented only 7% of its portfolio but 29% of its losses. Numerous large banks are now in the middle of enormous CRA commitments. In 2004 J.P. Morgan Chase ( JPM - news - people ) agreed to provide $800 billion of such loans over the course of 10 years.

For all the talk of unsold condos in Miami and foreclosed McMansions in California, the epicenters of the mortgage crisis are inner-city urban areas--precisely those areas where the CRA was most applicable. As the Boston Federal Reserve put it in a massive 2008 study, "In the current housing crisis foreclosures are highly concentrated in [urban] minority neighborhoods." The study found that borrowers in these areas were seven times more likely to be foreclosed on than the general population. Analysis by the Pew Research Center and another by The New York Times found that mortgage holders in these areas had."

FRB: Did the Community Reinvestment Act (CRA) contribute to foreclosures and the financial crisis? And, is the CRA being reformed?

The Federal Reserve Board has found no connection between CRA and the subprime mortgage problems. In fact, the Board's analysis (102 KB PDF) found that nearly 60 percent of higher-priced loans went to middle- or higher-income borrowers or neighborhoods, which are not the focus of CRA activity. Additionally, about 20 percent of the higher-priced loans that were extended in low- or moderate-income areas, or to low- or moderate-income borrowers, were loans originated by lenders not covered by the CRA. Our analysis found that only six percent of all higher-priced loans were made by CRA-covered lenders to borrowers and neighborhoods targeted by the CRA. Further, our review of loan performance found that rates of serious mortgage delinquency are high in all neighborhood groups, not just in lower-income areas.

 

[kyzr]

Good debate, thanks. Hopefully someone can nail down the actual causes of the financial crisis, and assign blame where it belongs and fix the problem. Maybe a presidential debate question? Gotta run. <poof>