CRA is the root cause for the Housing Bubble / Mortgage Meltdown, period!
Ultimately it led to DPA FHA loans, then we created Sub Prime Hybrids, like ZERO DOWN 2/28 ARM's and 3/27 ARM's with no MI that accepted 560+ FICO's...
Millions purchased under these programs for 11 years, no risk no gain, these where the beginning of the end, we are just starting to come out of that tail spin...
Now today and for a very long time, USDA loans are Federally Funded / Insured loans with your tax payer funding, and guess what, they are ZERO DOWN NO MI LOANS...
What a deal, $500 dollars and you can own your own home...
They did it in the '80's and we just came out of it again, how much you wanta bet they will do it again????
"Everyone is entitled to his own opinion, but not his own facts"
Daniel Patrick Moynihan
GWV5903 is a prime example of the total failure of conservatism.
Q: What is conservatism?
A: Conservatism is the domination of society by an aristocracy.
When you understand that fact, it explains why the conservative world view MUST never be tainted or diminished, and why conservatives cannot accept any truth that blames their beloved hierarchy. There's an old saying: 'there are 2 types of Republicans, millionaires and suckers'. It is crucial to conservatism that the suckers must literally love the order that dominates them.
The financial crisis is also a prime example of how conservatives have created a narrative where they pin the blame on poor people and government. Neither were the cause.
Here is what we DO know:
1) The financial crisis was not caused by low and middle income families buying a home.
2) It was not caused by dead beat poor people.
3) Fannie and Freddie were not to cause.
4) The Community Investment Act was not the culprit either.
The crisis was caused by private lending, to mostly upper middle class and the wealthy. ONLY 6% of of all the higher-priced loans were extended by CRA-covered lenders to lower-income borrowers or neighborhoods in their CRA assessment areas. The majority of those foreclosed on were wealthy and upper middle class, plus a huge segment of speculators; buyers who were wealthy home flippers looking for a fast buck. They strategically walked away from investments that went sour, not from their 'homes'. They never had any intent on living there.
Only a huge amount of mortgage defaults at once could cause a rupture of the housing market. And only a huge amount of speculators dumping 'bad' investments all at once could explain it. Because if it were honest citizens who were buying a homestead, they kept paying even when they should have walked away. If those were the people to blame, it would have been a slow leak, not a rupture.
AND, what really sucks for the right wing propaganda of lies, all the way back to the late '90's there was one very outspoken and vocal critic of predatory lending practices, they even held protests at companies like Wells Fargo and Lehman Brothers...ACORN
But, if you need to make government the scapegoat for the private sector, it brings us full circle...Bush.
Maybe you just FORGOT...
Bush's 'ownership society'
"America is a stronger country every single time a family moves into a home of their own," George W. Bush said in October 2004. To achieve his vision, Bush pushed new policies encouraging homeownership, like the "zero-down-payment initiative," which was much as it sounds—a government-sponsored program that allowed people to get mortgages without a down payment. More exotic mortgages followed, including ones with no monthly payments for the first two years. Other mortgages required no documentation other than the say-so of the borrower. Absurd though these all were, they paled in comparison to the financial innovations that grew out of the mortgages—derivatives built on other derivatives, packaged and repackaged until no one could identify what they contained and how much they were, in fact, worth.
As we know by now, these instruments have brought the global financial system, improbably, to the brink of collapse.
End of the ‘Ownership Society’