Liberal Housing Policies ‘Clearly’ Led to Collapse

December 21, 2012 08:41

“There is a clear pattern of increased defaults for loans made by these banks in quarters around the (CRA) exam. Moreover, the effects are larger for loans made within CRA tracts,” or predominantly low-income and minority areas. – IBD




From IBD Editorials


To satisfy CRA examiners, “flexible” lending by large banks rose an average 5% and those loans defaulted about 15% more often, the 43-page study found.


The strongest link between CRA lending and defaults took place in the runup to the crisis — 2004 to 2006 — when banks rapidly sold CRA mortgages for securitization by Fannie Mae and Freddie Mac and Wall Street.


CRA regulations are at the core of Fannie’s and Freddie’s so-called affordable housing mission. In the early 1990s, a Democrat Congress gave HUD the authority to set and enforce (through fines) CRA-grade loan quotas at Fannie and Freddie.


[Editor’s note: “Obama was a pioneering contributor to the national subprime real estate bubble, and roughly half of the 186 African-American clients in his landmark 1995 mortgage discrimination lawsuit against Citibank have since gone bankrupt or received foreclosure notices.” – from Obama sued banks to give subprime loans to Chicago’s African-Americans]

Housing analysts say the CRA is the central thread running through the subprime scandal — from banks and subprime lenders to Fannie and Freddie to even Wall Street firms that took most of the heat for the crisis.

[Read the new study from National Bureau of Economic Research]



Also please consider:

Democrats cover up government fault in financial crisis report

Government programs that caused housing crisis failed to increase ownership rate

Housing policy blamed for collapse

Barney Frank Must Go – probably to jail

“Ten Most Wanted Corrupt Politicians” for 2009

Fannie-Freddie Fix at $160 Billion With $1 Trillion Worst Case

Covering Their Fannie

The Bottomless Pit Of Fannie And Freddie

CRAven Cover-Up




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