75% of all subprime loans had nothing at all to do with the CRA. In fact, the way the law is written, Banks did not have to do risky lending to fulfill their CRA obligations. 75% of all Subprime loans were not covered by the CRA.
The CRA covered Bank of America did not make a single subprime loan in 2004 & 2005, and in 2006 & 2007 only 2% were subprime. WaMu on the other hand had 5.6 billion in subprime loans.
http://www.ocregister.com/articles/loans-20542-subprime-banks.html
The most important aspect is to find the real culprits of the bubble and the CRA isn’t it. I think the CRA outlived it’s usefulness - but claiming it’s responsible for this mess blinds us to what really happened.
There is no rational way we can claim wall street was run by progressives for the last 40 years, there’s been a steady stream of deregulation. Everything we’ve done has to remove regulation from Wall Street.
But think of it this way, if anybody actually did their jobs we wouldn’t have had this mess. If Mortgage Brokers didn’t write loans they knew would fail, we wouldn’t have had this mess. If Moody’s & S&P said “We can rate this stuff...”, we wouldn’t have had this mess. If the Pension & Mutual fund guys said “Hey, that doesn’t make sense a AAA rating with a really high rate of return?” we wouldn’t have had this mess. So why did they fail to do their jobs?
Sorry..but I trust the WSJ,Investor’s Business Daily, and a boatload of other finacial experts more than I do this Orange County Register ‘reporter’. The CRA is a 30 year program and this writer only goes back a few years to do his ‘research’? Not buying it. We know what happened and there is plenty of blame to go around, but the root of the mess is the CRA and the easy credit.
Ronald Campbell
reporter, Orange County (CA) Register
rcampbell@ocregister.com
Ronald Campbell is a reporter for the Orange County (CA) Register. He worked at the (Fairfield, CA) Daily Republic and the Bakersfield Californian before joining the Register in 1987. Campbell started the Register’s program in computer-assisted reporting and has participated in many investigations, including loan discrimination,...”
It would appear that this ‘reporter’ has a dog in this fight. That pretty much disqualifies him from being a credible source.