Community Reinvestment Act

[KMAN]

Information on how the lenders got into this position.

It's not a market failure, it's a government made problem but surprising ly (roll eyes) the media is not reporting on this.

Community Reinvestment Act - Wikipedia, the free encyclopedia

FRB: Community Reinvestment Act

 

[dilloduck]

Information on how the lenders got into this position.

It's not a market failure, it's a government made problem but surprising ly (roll eyes) the media is not reporting on this.

Community Reinvestment Act - Wikipedia, the free encyclopedia

FRB: Community Reinvestment Act

The Fed is supposed to be looking out for Americans instead of letting this kind of shit happen. Why did they just ignore this idiotic scheme ?

 

[Truthmatters]

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

 

[Ravi]

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."

 

[NOBama]

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

Why would you say such a thing? Are you implying that this mess is a matter of racial discrimination?

 

[editec]

You don't know what the fuck you're talking about, KMAN.

 

[HoleInTheVoid]

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.

 

[RetiredGySgt]

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."

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.

 

[Ravi]

Loans created because Government encouraged and then threatened Banks into making them.

Show me.

 

[Ravi]

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.

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

Why?

 

[Truthmatters]

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


Do you guys realize this means it was not CRA's effect that did this guys?


It was how the loans were made profitable by the Gramm leach Blialey act by allowing them to be packaged with other loans and securites and resold at a profit and avoiding the end results of their failure.

 

[Care4all]

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.

you're missing it, completely....goes deeper...

It's Still Not CRA | New America Blogs

the lenders NOT COVERED by CRA made 75% of the subprime, risky loans, then sliced and diced them, and sold them off, masked in different forms, like MBS's....mortgage backed securities....while the regulatory and rating agencies turn a blind eye...and rating agencies were rating these MBS's as top of the line investments, which they were not....

 

[HoleInTheVoid]

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

Why?

You're a retard.

I said twice my number was aan example/hypothetical.

How does asking a question indicate a desire for anything?

Now I am somewhat skeptical that A) 25% of all mortgages written under the CRA and if they are B) they are legitmate in accordance letter/spirit of the law. In other words: people gaming the system to get a break they don't need/couldn't qualify for.

 

[Care4all]

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.

no hole, i said 75% of the subprime mortgages made to borrowers the past 5 years, were made by lenders that were not covered by CRA legislation...they were UNREGULATED....and not required to accomodate the lower income borrowers or small business owners or women which the CRA covers.
note!
75% of the loans made the past 5 years....

some are using a figure of 50%, but that is a figure from statistics up to 2004, i believe, and does not include the push these institutions not covered by CRA have had the past few years....

 

[KMAN]

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."

It happened because the banks realized the government would bail them out if they got into trouble... and that is exactly what our government is trying to do... when there is no risk of failure, this happens.

 

[KMAN]

You don't know what the fuck you're talking about, KMAN.

Great informational post...but typical.

 

[Truthmatters]

Reconstruction Finance Corporation - Wikipedia, the free encyclopedia


Hoover appointed Atlee Pomerene of Ohio to head the agency in July 1932. Hoover's reasons for his surprising reorganization of the RFC included: the broken health and resignations of M. Eugene Myers, Paul Bestor, and Charles Gates Dawes; the failure of banks to perform their duties to their clientele or to aid American industry; the country's general lack of confidence in the current board; and Hoover's inability to find any other man who had the ability and was both nationally respected and available. (Shriver 1982)

The RFC was bogged down in bureaucracy and failed to disburse much of its funds. It failed to reverse the growth of mass unemployment before 1933. Butkiewicz (1995) shows that the RFC initially succeeded in reducing bank failures, but the publication of the names of the recipients of loans beginning in August 1932 (at the demand of Congress) significantly reduced the effectiveness of its loans to banks because it appeared that political considerations had motivated certain loans. Partisan politics thwarted the RFC's efforts, though in 1932 monetary conditions improved because the RFC slowed the decline in the money supply.

Starting 1933 Franklin Delano Roosevelt kept the agency, increased the funding, streamlined the bureaucracy, and used it to help restore business prosperity, especially in banking and railroads. He appointed Texas banker Jesse Jones as head, and Jones turned RFC into an empire with loans made in every state. (Olson 1988)

We have been through this before guys

 

[busara]

It happened because the banks realized the government would bail them out if they got into trouble... and that is exactly what our government is trying to do... when there is no risk of failure, this happens.

how do you know this?

 

[KMAN]

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.

You can't link Raines to Obama or you will be called a racist... You see they don't have anything solid to add to the discussion so they go with personal attacks...but we all know this already.

 

[KMAN]

how do you know this?

Isn't it common sense???? If you have no risk you will be tempted not to follow good business practices. Loaning to people who are not qualified is obviously a poor choice. If the business was going to held accountable they would not have done this.