@ Britpat- Look, I realize that if you sit around letting Limbaugh and Hannity do your thinking for you, you probably start believeing all sorts of BS.
But let's look at what the Banking Industry itself said about CRA.
CRA is not to Blame for the Mortgage Meltdown
It's time to stop the scapegoating: According to a study by the Federal Reserve, 94% of high-cost loans originated during the housing boom had nothing to do with Community Reinvestment Act goals. Lending to poor didn't spur crisis -Fed's Kroszner
The Comptroller of the Currency. John C. Dugan, agrees: "CRA [the Community Reinvestment Act] is not the culprit behind the subprime mortgage lending abuses, or the broader credit quality issues in the marketplace. Indeed, the lenders most prominently associated with subprime mortgage lending abuses and high rates of foreclosure are lenders not subject to CRA. A recent study of 2006 Home Mortgage Disclosure Act data showed that banks subject to CRA and their affiliates originated or purchased only six percent of the reported high cost loans made to lower-income borrowers within their CRA assessment areas."**
CRA was effective long before the subprime market existed. CRA was passed in 1977 to correct the longstanding problem of redlining the lack of lending in low and moderate income communities and in communities of color. CRA has been on the books for three decades, while the lending practices that created this crisis didnt exist until the past five years.
Most subprime lenders werent covered under CRA. The predominant players in the subprime market mortgage brokers, mortgage companies and the Wall Street investment banks that provided the financing arent covered under CRA. Finance company affiliates of major banks also participated heavily, but are only included in CRA to the extent their bank parents choose them to be. In fact, many banks shifted the most risky lending the loans at the root cause of this current crisis -- to affiliates to escape CRA requirements and regulatory oversight.
Wall Street created the demand for riskier loans. The subprime market is the result of loans made without regard to the borrowers ability to repay the loan and with little or no documentation of income. Lenders chose to engage in risky underwriting practices because Wall Street was eager for high-interest investments, not because of CRA.
Regulatory oversight and accountability was missing. The lack of regulation in the subprime market made it easy for subprime lenders to undercut responsible lending. Because lenders used artificially low initial payments and passed the loans onto investors while hiding the disastrous consequences coming down the line, many borrowers found themselves in loans that were ultimately unaffordable. In many communities, particularly communities of color, subprime lenders were often the only ones serving the community. Had regulators leveled the playing field through common sense underwriting requirements and more vigorously enforced CRA requirements instead of allowing a race to the bottom, this crisis would have been averted.
So let's stop blaming poor people for the greed of rich people.
The real failure of Obama is that he didn't have the Justice Department go after these crooks full throttle.
Loaning a quarter-million $$ to no income people isn't a problem? Who knew?
Do you lack reading comprehension skills? DO you need someone to help you with the big words?
CRA wasn't the problem. Those weren't the loans that failed. It was the sub-prime mortgage mess that failed miserably, so a few hedge fund managers could stuff their pockets.