the government forced banks to offer loans to people who could not qualify.

[energy star]

"the government forced banks to offer loans to people who could not qualify"

Can someone stick a date on this madness?

[hearthman]

http://en.wikipedia.org/wiki/Community_Reinvestment_Act

Note that this is from Wiki, which is a notoriously liberal slanted source. For instance, you don't see it discuss how Janet Reno, under Clinton's orders threatened major bank presidents with federal jail if they did not make known bad loans to minorities. Wiki also plays down the role the CRA had in the crash. Note that many of these known bad loans were bundled into packages with decent and good loans then sold off as "derivatives". These, too eventually blew up into what we know as the ""Sub-Prime Mortgage collapse". Bound to happen when you make loans below what you lend money to member banks knowing these people will not pay them back. More liberal vote buying.

[geerair]

Note that this is from Wiki, which is a notoriously liberal slanted source.

If your political viewpoint is to the right of the John Birch Society that could possibly be the case.

for instance, you don't see it discuss how Janet Reno, under Clinton's orders threatened major bank presidents with federal jail if they did not make known bad loans to minorities.

Probably because this is a wingnut myth.

Wiki also plays down the role the CRA had in the crash.

Possibly because there is no credible evidence that the CRA played anymore than a small role in the financial crisis.

Note that many of these known bad loans were bundled into packages with decent and good loans then sold off as "derivatives". These, too eventually blew up into what we know as the ""Sub-Prime Mortgage collapse". Bound to happen when you make loans below what you lend money to member banks knowing these people will not pay them back. More liberal vote buying.

Bound to happen when financial institutions let their greed outstrip their caution.

[hearthman]

http://commonsensewonder.blogspot.co...ing-banks.html

Just one of many sources online. Keep on sneering...

[geerair]

http://commonsensewonder.blogspot.co...ing-banks.html

Just one of many sources online. Keep on sneering...

Your source said nothing about Clinton and Reno threatening bank officials with fed. jail.

Looks like you just made that up.

[cehs]

Your source said nothing about Clinton and Reno threatening bank officials with fed. jail.

Looks like you just made that up.

I heard it on the 6 o-clock news (at that time, in the 90s), that banks were told that if they did NOT accept these loans, they would be investigated by the government and prosecuted for discrimination against minorities.....
.

[DeltaT]

I heard it on the 6 o-clock news (at that time, in the 90s), that banks were told that if they did NOT accept these loans, they would be investigated by the government and prosecuted for discrimination against minorities.....
.

This is about as close the correct factor that took place back then. The rest of you guys can continue to argue about who is right or wrong.

This factor did start in the Clinton Administration & it was actually a well meaning program to help inner citys stabilize and grow, which we certainly could use.

The Federal Government basically told any lenders, mortgage bankers who were existing FHA, VA or any other sort of government insured or guaranteed loans ( the federal government itself has never been in the loan or mortgage business for single family homes) that the lenders of those loans could not check the mortgage loan qualifications of the buyers.

It was that simple.

So banks and mortgage lenders did make a lot of money, of course. All the guards were put down by our Federal Govenment and that let the fox into the chicken coup.

The sad part of this is that lenders, not all lenders which is a fact overlooked, knew that and in a lot of cases encouraged borrowers to fill out the lenders forms to fit the house they wanted to buy. In normal days this would have been purgery but no more since the Federal Government allowed this and encouraged this to happen.

So borrowers purchased anything they wanted. And single family house prices went through the roof since sellers were now having bidding wars to get their home by people who could not afford them.

Anyway, some of you guys will even argue with this. So if your mind is open enough to deal with facts, look up who sponsored this program. They are the ones who took a well meaning program and turned it into a nightmare for, mainly, the responsible tax paying citizens of this nation who have and will continue to pay for this childishness by a few of our elected leaders of the time.

[motoguy128]

If your political viewpoint is to the right of the John Birch Society that could possibly be the case.

Probably because this is a wingnut myth.



Possibly because there is no credible evidence that the CRA played anymore than a small role in the financial crisis.


Bound to happen when financial institutions let their greed outstrip their caution.

A voice of reason.... you will likely soon be smeared and discredited. Thou shall have non liberal leaning sources of facts. On,y conservative leaning blogs and sources are accepted here.

Cra helped create a relaxed lending culture. If they coulkd offer loans to poor people with bad credit just looking for affordable housing, hey, whynnot offer them to anyone nokt matter the home value or income level. Well allow stated incomes, well let appraisers, realtors, borkers, underwriters and originators to all conspire to push paper.

You not really forcing a bank to do something when they are making money hand over fist on it.


My source is my wife. A mortgage broker and underwriter in san diego from about 2000 to 2003. Then an originator in iowa from 2004 to present.

If cra was the cause then how do myou explain the low forclusure rates in some areas that do plenty of fannie and freddie loans, fha, rural housing, et? Because those areas were not overspeculated ans vairable rates mortgages were less common.


If anything, I blame the mess on the improper use of ARMS and stated income. Reduce those and the whole mess never happens.


Sent from my SGPT12 using Tapatalk 2

[netsalt]

The question I have is: When have banks EVER done something that didn't make them money? That is their business, it's what they do. Only the seriously deluded think the government could (or would) force them to do anything that might cost them a shekel.

[motoguy128]

So a policy, that is still in place now, started over 30 years prior, that had no negative effect in many locals, caused the collapse?

I think If you did an rca of the situation. Cra is not the root cause. There is no one root cause, its a complicated series of issues. A perfect storm.


Keep in mind, private lenders are not subject to cra, yet they were into it far deeper than other lenders.


Sent from my SGPT12 using Tapatalk 2

[2sac]

and Sylvesters opinion

[the mojo]

So a policy, that is still in place now, started over 30 years prior, that had no negative effect in many locals, caused the collapse?

I think If you did an rca of the situation. Cra is not the root cause. There is no one root cause, its a complicated series of issues. A perfect storm.


Keep in mind, private lenders are not subject to cra, yet they were into it far deeper than other lenders.


Sent from my SGPT12 using Tapatalk 2

Yes the CRA was just a small segment it had to be combined with MBS CDOs and CDS and SCDOs in tranches ramped up under SP triple AAA to the tune 79%. The Federal Reserve knew the SEC knew and others knew and did nothing because they had the blessing of Greenspan.

The repeal of Glass Seagel was the root cause which transfered the risk to other banks which they enjoyed high yields with further risk until that risk became so great the risk was going out the front door and coming back in the back door to the point of just shy full systemic.

The Volkler rule has already been watered down with 300 pages of amendments.

It was both parties which caused this,Congress pretty much exists today only to serve special money interests.

[Tech Rob]

Why would so-called conservatives acknowledge that unrestrained capitalist greed was what crashed the US economy and housing market? Capitalism is their sacred cow and we must continue to make publicly funded cash sacrifices to their gilded idols a.k.a. job creators. Then, and only then, can the climate of uncertainty end for business, and the power of the private sector be unleashed from the oppressive chains of regulation.

L O L

If you buy that load of crap, I've got a bridge to sell you.