Posted on 07/08/2009 12:04:03 PM PDT by fiscon1
I first heard about the Community Reinvestment Act sometime in late 2008. When I first heard commentators come on major networks like Fox News and assign it as the most significant blame for the mortgage crisis I was stunned. I have spent the last nearly seven years in the mortgage business. If the CRA was such a factor, why hadn't I heard of it before? As I learned more about it, I started to understand why it became such a popular cause celebre.
(Excerpt) Read more at theeprovocateur.blogspot.com ...
This report - which discusses CRA - was released yesterday to little or no fanfare.
The Role of Government Affordable Housing Policy in
Creating the Global Financial Crisis of 2008
STAFF REPORT
U.S. HOUSE OF REPRESENTATIVES
111TH CONGRESS
COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
JULY 7, 2009
http://republicans.oversight.house.gov/media/pdfs/20090707HousingCrisisReport.pdf
The point is that the CRA, Fannie and Freddie and government pressure to increase homeownership rates were precipitating factors in destroying sound credit standards which had prevailed in the home mortgage market for many decades.
Yes, incompetent rating agencies, sloppy securitization practices and failure of investors to perform due diligence on the securitized mortgages they purchased all contributed to the eventual collapse.
But the primary causative factor in the economic crisis was the destruction of sound underwriting standards in the residential mortgage market, and the CRA, Fannie, Freddie and the government push to increase homeownership rates no matter what all got the ball rolling on the slippery slope downhill.
Unbelievable bunch of RATS. Why are the protectors of the Fannie Mac black? Is it because they want the black vote or is there something more here. Something smells and it is plain to see. It is these black Congress RATS and Frankeeeeee that pushed America down to where we are now. I am pissed. Listen to the video.
It’s referenced in the article. It’s nonsense.
No actually it is the article that is nonsense. You can not just corrupt the free market with enitities like Fannie and Freddie, groups like ACORN and legislation like the CRA tha give them all political cover and expect that it will not eventually completely poison the market.
If you do not want to believe the facts then dont. Your choice.
Thank you for posting this! I got involved in a thread several days ago or more about whether or not CRA was cause of the crash, which it obviously was not.
The GOP needs to blame it’s buddies and pals for this crash, not the poor schmuck with a $70,000 house who lost his job.
And the GOP can blame itself for constantly pushing for less regulation of financial institutions even after the S&L fiasco, the Enron mess, the Worldcom mess, and the dot.com bubble.
parsy, who says I told you so!
The Staff Report is NOT referenced in the article you posted, much less refuted.
ha! Blame whoever you want. I am sureyou are applauding Barney Frank then as you try to cast the blame on the GOP.
No, it is not nonsense.
The author is placing the blame on the loose money, but we’ve had loose money bubbles before, but not a residential mortgage bubble and crash of this magnitude.
What was different this time was the utter destruction of sound credit standards, where deadbeats and flippers could get any mortgages they wanted.
The author’s claim that CRA, Fannie, Freddie, the government pressure to increase homeownership rates no matter what, etc. resulted in a mere “meticulous” loosening of credit standards is laughable.
I’m blaming them both! Equal opportunity in this mess.
parsy, who wants the GOP to own up to its problems
Fannie and Freddie - All the defense we should need for why the government needs to be kept away from our health care.
And kept away from the entire market with their cap and tax propaganda.
After these new agendas cause more economic collapse because of politically corrupted practices in the market we will then have to read nonsense articles like this claim that the “public option” in health care was only a small percent of the problem... or the “cap and tax” and phoney green jobs were only a small part of the problem.
To excuse the trillions of dollars in politically motivated bad loans and the extortion methods of political orginizations like ACORN is nonsense.
That’s because bubbles are never the exact same. The circumstances that are set up as the bubble is created are never the same.
let’s look at what was going on. We had the internet crash. then we had 9/11 and then Enron, Worldcom et al. Ironically enough, a lot of people were saying that we were facing an unprecedented economic crisis at the beginning of 2002.
At the time, the only industry that was thriving was real estate. That’s because the weak economy caused interest rates to fall precipitously. First, we had the refi boom and then a total real estate boom. So, we had loose money and only one industry to put that money. With all of that money flowing into real estate, banks had to find new ways to use that money. Traditional borrowers had been tapped. That’s when sub prime started to expand and explode.
Now, that’s a lot more logical than some obscure law that didn’t even cover the loans that are now a problem.
You said - “That’s because bubbles are never the exact same. The circumstances that are set up as the bubble is created are never the same.”
Of course they are never the same but it is the left-wing and the democrat party that are masters of setting up and creating market “bubbles”.
Whenever you intertwine a political agenda into a part of the market you risk creating a bubble. This is what will happen in the energy industry if the democrats follow the left-wing green agenda. They will pass all different types of legislation designed to prop up some people and companies at the expense of other people people and companies. They will create a market driven by political forces instead of free market forces.
This same ideology was continually be pushed forth by the democrat party and the left-wing activists in the housing and banking institutions for years. It infected and poisoned the market.
Why do you think that the number of lobbyists are increasing hundreds fold? It is because government is expanding more and more into the private sector. Yet this article trys to make the absurd claim that it is a lack of government that is the cause.
I went back to the thread. Try this.
parsy, the htmlcriple
parsy, the postchanger?
No. I didn’t know how to cut and paste the link to the report. Is it just like regular cut and paste?
Did I mess something up?
parsy, who is innocent, he thinks
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