Posted on 09/16/2009 10:25:32 PM PDT by Shellybenoit
The Community Reinvestment Act, first passed in 1977 under Jimmy Carter, was intended to increase minority homeownership. It grew out of charges that banks were "redlining" entire inner-city neighborhoods as bad credit risks. Banks now were forced to perform outreach to these areas.
In the '70s and '80s, banks could show that they were trying to do that by advertising in minority newspapers and having representatives sit on the boards of local groups. In other words, they were rated on the effort made and not on the results achieved. Creditworthiness still mattered.
In 1995, as Howard Husock pointed out eight years ago in City Journal, "the Clinton Treasury Department's 1995 regulations made getting a satisfactory CRA rating much harder. The new regulations de-emphasized subjective assessment measures in favor of strictly numerical ones. Bank examiners would use federal home-loan data, broken down by neighborhood, income group, and race, to rate banks on performance."
Creditworthiness and due diligence no longer mattered. As a 1999 New York Times editorial observed: "Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Bill Clinton administration to expand mortgage loans among low- and moderate-income people and felt pressure to maintain its phenomenal growth in profits."Source
That was the start of the housing bubble that almost brought down the US Economy. But if one near depression isn't good enough for you, Barney Frank and his Democratic buddies have a surprise...an even stronger Community Reinvestment Act
(Excerpt) Read more at yidwithlid.blogspot.com ...
This is insanity.
Fine as long as any buyer has to put down at least 20% and payments , insurance, and taxes don’t cost more than 30% of their income!
Under that criteeria, which existed when we bought our home, banks will go along.
Anything less than that no one should be able to buy a home!
Oh, yeah THAT’S gonna help a LOT! /s
bttt
After what we have JUST been through ???
It was the liberalizing of the CRA that eventually got us into the sub-prime mess in the first place !!!
Just remember folks - shit rolls down hill ... and we’re standing at the bottom !!!
ping
Let’s push the kings off the hill into their own sh*t.
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