Free Republic

...Bank of America said in 3Q 2008 that while its CRA loans constituted 7 percent of its owned residential-mortgage portfolio, they represented 29 percent of that portfolio's net losses. [Pinto 2009a] The annualized loss rate from the CRA book was 1.26 percent and represented 29 percent of the residential mortgage net losses. [Husock 2008]... ...According to George Benston of Emory University, larger banks' loans to low to moderate income borrowers are operated as a strategic loss to get a satisfactory CRA rating for regulatory approval for mergers and acquisitions. This means larger banks charge extremely low rates that smaller banks...

The government's move to ease the limits on the securities holdings of Fannie Mae and Freddie Mac has ignited a debate among analysts about what the companies will do with their longer leash. When the Treasury Department took over Fannie and Freddie last year, one of the requirements they set for the companies required them to begin shrinking their portfolios of mortgages and related investments, which total a combined $1.5 trillion. The idea was to rein in the companies' size and growth. But last Thursday, the Treasury eased that requirement, meaning the companies won't be forced to sell mortgages next...

Hi All - it has been a long time since I have posted on FreeRepublic. I am back and I will also be on several blogs - I am looking forward to reconnecting with the freeper community. In the meantime - I have continued in the CRA and am in my 4th Term as CRA Sgt at Arms. Looking forward to some 2010 election fun!!!

Of all the factors behind the collapse of America's financial institutions during the second half of 2008, few have been as trumpeted - or misunderstood - as the Community Reinvestment Act (CRA). This Carter-era legislation, intended to boost residential mortgage lending in lower-income urban neighborhoods, increasingly has served as a blank check for community groups to shake down depository institutions into lowering their credit standards to reach marginally qualified borrowers. In extracting such concessions, these groups have contributed to the ongoing explosion in loan defaults and foreclosures. Undaunted, House Democrats, led by Rep. Eddie Bernice Johnson, D-Tex., are proposing to...

This is the second installment of a Monday series excerpting the chapter on political implications from Thomas Sowell's latest book, "The Housing Boom and Bust."IBD Exclusive Series: Thomas Sowell on The Politics of the Housing BoomIn recent times, government officials have increasingly pressured banks and other lenders to lend to people whom they would not lend to otherwise. One of the first federal government efforts to change the process of mortgage lending by private financial institutions was the Community Reinvestment Act of 1977. Like many government policies or programs, it began small and grew in scope and severity over the...

Urge a reexamination of Community Reinvestment Act compliance U.S. Representative Michele Bachmann (MN-06), a member of the House Financial Services Committee, wrote Sheila Bair, Chairman of the FDIC and Chairman of the Federal Financial Institutions Examination Council (FFIEC), earlier this week to urge a thorough reexamination of the rules governing compliance with the Community Reinvestment Act (CRA). “Under current rules, many banks make donations to and enter into partnership with ACORN and its affiliates to meet their obligations under the CRA. Millions of dollars flows from these banks into ACORN in what amounts to borderline extortion,” said Bachmann. “There’s more...

Recent disclosures about certain questionable practices at ACORN, the left-leaning nationwide community advocacy organization, have raised questions about the organization's very legitimacy. But as ACORN rightly moves to get its house in order and restore its credibility, it might be worth taking a few moments to ask some other questions, not about ACORN but about ourselves, and our commitment to lifting up the millions of our fellow Americans who live in a netherworld of poverty, hopelessness and victimization. You cannot understand the ACORN videos (understand, not condone), without making some honest effort to understand this netherworld in which ACORN and...

Did the Community Reinvestment Act—the 1977 federal law pressing banks to lend to low- and moderate-income borrowers—fuel toxic lending and thus play a significant role in causing the financial meltdown? “CRA was not the cause of the crisis,” Comptroller of the Currency John Dugan maintained this past August. Though he had little quantitative detail about the performance of CRA-related loans, Dugan claimed that they had performed better than loans made by lenders not subject to the CRA. Further, he contended, borrowers of CRA loans had defaulted at much lower rates than borrowers of subprime mortgages. Other defenders of the act...

GLENN: From high above Times Square in Midtown Manhattan, this is the third most listened to show in all of America. Hello, you sick twisted freak. Welcome to the program. Is Michele Bachmann on the phone? Congresswoman Bachmann, welcome to the program. How are you? CONGRESSWOMAN BACHMANN: Good morning, Glenn Beck. I'm doing great. Great to talk to you. GLENN: May I say I believe you are one of a handful. Give me a number. I'm thinking five, a handful of people, maybe three, that actually are in there doing the right thing, and you'll fall on your sword if...

Conservative Republicans are capitalizing on the troubles of community activist group ACORN—ranging from charges of voter registration fraud to embarrassing videos of its employees—to revive their long-standing fight against a federal law that grades banks on their investments in poor and minority neighborhoods. The 1977 Community Reinvestment Act was intended to end redlining, a practice in which banks in effect walled off many inner-city neighborhoods from mortgage loans. But some GOP lawmakers say it has outlived its purpose and is being used inappropriately by ACORN to shake down banks for money. They want to repeal the law, scale it back...

Expanding the Community Reinvestment Act As we try to shake off the financial crisis, here's a bright idea. Take a law that has led to the writing of an enormous amount of bad mortgages and expand it. Then take enforcement away from bank examiners and give it to housing activists. Sound like a poisonous cocktail? Well, it is what the Obama administration and Democrats are currently stirring up on Capitol Hill. The White House and Congress want to expand a 30-year-old law--the Community Reinvestment Act--that helped to fuel the mortgage meltdown. What the CRA does, in effect, is compel banks...

As we try to shake off the financial crisis, here's a bright idea. Take a law that has led to the writing of an enormous amount of bad mortgages and expand it. Then take enforcement away from bank examiners and give it to housing activists. Sound like a poisonous cocktail? Well, it is what the Obama administration and Democrats are currently stirring up on Capitol Hill.

With all the attention paid to the health care battle, Association of Community Organizations for Reform Now, and the president's "Full Ginsburg" appearances on five Sunday talk shows, few people noticed a hearing with an exceedingly boring title -- "Proposals to Enhance the Community Reinvestment Act" -- held last week in the House Financial Services Committee. But the session marked a key moment in the ongoing battle between Republicans and Democrats over what caused our current financial woes -- and how we might best avoid getting into the same trouble again. At the hearing, and in others across Capitol Hill,...

The Acorn scandal, in which amateur journalists posing as a prostitute and a pimp went seeking a mortgage for a house of prostitution and received advice on how to evade the law, is a fitting new chapter in the controversial history of the advocacy group. Acorn found its way into the mortgage business through the Community Reinvestment Act, the 1977 legislation that community groups have used as a cudgel to force lenders to lower their mortgage underwriting standards in order to make more loans in low-income communities. Often the groups, after making protests under CRA, were then rewarded by banks...

Nothing succeeds like failure. Here's a press release from the National Community Reinvestment Coalition: Expansion of Community Reinvestment Act Would Promote Economic Security and Financial Inclusion for For ... whom? Can't you guys at least finish your titles? I'm imagine in your "Who? Whom?" equation, I'll end up a Whom, but I don't think the end of your sentence was going to be "for Steve Sailer's Family." So, what's in Barney's Bill, H.R. 1479, the "Community Reinvestment Modernization Act of 2009"? - Extension of the CRA from mortgages to small business loans. - Inclusion of credit unions (my vague impression...

A number of experts believe that aggressive enforcement of the 1970s-era Community Reinvestment Act contributed to the mortgage meltdown, and thus to the greater financial crisis, by requiring financial institutions to lend to unqualified borrowers. Now, the Democratic majority in the House of Representatives is responding to that situation by proposing to expand the scope and power of the Community Reinvestment Act. This morning House Financial Services Committee chairman Rep. Barney Frank held a hearing on H.R. 1479, the "Community Reinvestment Modernization Act of 2009." The bill's purpose is "to close the wealth gap in the United States" by increasing...

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...

The Acorn scandal, in which amateur journalists posing as a prostitute and a pimp went seeking a mortgage for a house of prostitution and received advice on how to evade the law, is a fitting new chapter in the controversial history of the advocacy group.Acorn found its way into the mortgage business through the Community Reinvestment Act, the 1977 legislation that community groups have used as a cudgel to force lenders to lower their mortgage underwriting standards in order to make more loans in low-income communities. Often the groups, after making protests under CRA, were then rewarded by banks with...

Oversight: As the Senate votes to de-fund Acorn, add pimping, tax evasion and human trafficking to voter fraud paid for with taxpayer dollars and you have an organized criminal enterprise. It's time to investigate.After Acorn workers were caught on tape in three cities allegedly abetting what they believed was a fraudulent-mortgage and sex-trafficking scheme, the Senate has voted overwhelmingly to strip the group of funding in the Transportation/Housing and Urban Development appropriations bill. The amendment, offered by Nebraska Republican Sen. Mike Johanns, passed by an 83-to-7 margin and marked the third time this year that Republicans have tried to block...