Toro
Diamond Member
All you need to know about the housing disaster and its causes is right here..........beyond sobering I might add!!! Boatloads of statistics to back up the assertions too..............
Once you read it, all doubts will be removed.....unless you are a mental case. Truth be told........politically, it was a stroke of genius by liberals.........a permanent game changer for the black vote. Fcukking brilliant...........
It is just plain bald faced fact that millions of Americans paid a song for a downpayment on a house they knew damn fcukking well they couldnt afford. And of course the banks played ball.......or be accussed by the Barney Franks of the world for being racist lending institutions. Fannie/Freddie is the greatest fraud ever perpetuated upon the American people...........
Federal bank regulators began using the 1977 Community Reinvestment Act (CRA) to press for racial equality. The issue was the statistical difference in approval rates, not a claim that most blacks could not get mortgage loans. New regulations required that the banks not just look for qualified buyers, but make a requisite number of loans to low and moderate income buyers (quotas). Then, when legislation was proposed in 1999 to permit banks to diversify into selling investment securities, the Clinton White House urged "banks given unsatisfactory ratings under the CRA be prohibited from enjoying the new diversification privileges." The Congress happily obliged. Another factor was HUD's beginning legal action in 1993 against mortgage bankers that declined a higher percentage of minority applicants. HUD also set a 42% target for Freddie Mac and Fannie Mae (FM & FM) to buy mortgages for people whose income were less than an area's median. Banks, sensing that FM & FM were implicitly guaranteed, where only too happy to not only issue these mortgages, but to buy FM & FM debt as well.
Meanwhile, when I purchased my first home, the bank damn near came into my bedroom to check under my pillow for credit verification..........vs people who just signed on the dotted line and were in their house almost the next day!! Are you fcukking kidding me............OF COURSE CRA directly facilitated the housing collapse. Only the hopelessly duped think otherwise
I take back my earlier post about Sowell being a hack.
So if you read the book, could you please present data backing up his argument.
These are the questions.
If the CRA caused the housing crisis, why didn't home prices rise fastest in the CRA redlined areas?
Why wasn't there greater rates of default in redlined areas?
Why didn't home prices fall faster in those areas?
Why did home prices rise fastest in the areas which have historically experienced housing booms and busts, i.e. Florida, California, Arizona?
Why were the biggest rates of default in the suburbs?
And how could the CRA cause the housing crisis when 24 of the top 25 subprime lenders weren't CRA lenders?
There were housing bubbles in many different countries. How did the CRA cause the housing bubbles in Spain? Ireland? Canada? Greece? Portugal? Singapore? South Africa? Australia? China? All those countries experienced a greater housing bubble than America.
All the data is referenced in the link I posted earlier.
This is what I mean believing in the efficacy of the free market. If you believe in the efficacy of the market, then the biggest price movements should have been in the places which saw the biggest increase in demand for mortgages, and thus the biggest collapses in home prices. That should have been CRA mortgages, right? Yet, none of this happened. The biggest home price movements were in the suburbs in the sunbelt, which did not qualify for CRA loans, and they were the areas that collapsed the hardest. How do you reconcile this if the CRA caused the financial crisis?
I await your answer.
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