Thanks for the explanation!
I understand the thinking behind this, but of course there are those pesky unintended consequences. :)
So it sounds like as housing prices rose during this time, 50% (50%!!) of loans were still allocated to “low income” individuals. I’m guessing income didn’t rise at the same rate as housing, so the number of people in that low income bracket were buying homes that were increasinging out of their price range. Right?
One anecdote that comes to mind is a $500,000 mortgage loaned by Washington Mutual. What did this couple do? Was one of them a doctor? A business owner? Nope. Both of them worked at McDonalds. A sad, sad case of extremely poor judgement by both borrower and lender, but the lender’s hands may have been tied because of CRA restrictions.