Quote:
Оriginally Postеd by Theadj
There was no punishment for failing to comply with the CRA for non-government lenders‚ it didn't cause anything. If anything having Fanny/Freddie probably helped save our ass when things came crumbling down around us. We'll absorb a shitload of losses due to it, but I'll take losses over complete collapse any day. I'd like to see an argument from you on how the CRA + Fanny/Freddie helped make the problem worse. I'm not defending democrats here (Clinton signed the law that killed Glass-Steagall), just want to see what your actual argument is.
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ya billions of bailout between the two is saving our ass. Also do you really understand that there are very few banks that aren't considered govt lenders because of fannie and freddie. Оr do you not undеrstand exactly how that whole leg of the banking issue happened.
BTW dont try and say you aren't defending the dems when their shit spawn of a program "CRA' didnt cause any issues. I know it wasnt the only cause‚ there were many. Also why i say no one will be held accountable because both dems and repubs had fingers in the pie.
You probably still think that the housing market is still a free market. How can this be when fannie and freddie as of 2008 had over 5 trillion in liabilities and banking regulations for loans can fill a library. The 5 trillion amount is being predicted to nearly double by the time this is over. This massive liability has been amassed by years of irrationally low lending standards forced by the CRA program. Banks must make these loans or have issues when merging/purchasing other banks, expanding branches into certain low income areas, and applying for other federal specialty programs. Its not forced acceptance of the CRA, but all of the above actions can be denied on the basis of not following CRA regulations. Definitely the best free market i have ever seen.
Whats worse is the original reports that caused the CRA to be created have been since shown to have overestimated the appearance of discrimination when banks were most likely doing what lenders have always done and continue to do - avoid risk. Nothing to do with race or location discrimination (redlining). The first audit of 24,000 lenders in 1993 showed only 48 complaints of discrimination since 1977. So yes it was a power grab of power over banks and lending groups.
CRA lending increased in the 90's upwards of 23% for low income risky loans. This nearly tripled after 2000 leading into 2005. Due to the expansion of the CRA program in 1999 through 2003. But also relaxed the oversight and intensive review of loans by rating banks with large portfolios. Relaxed regulations, well yes, but relaxed of a shitty law that itself was creating the problems and need for a regulatory group to watch over the CRA lending.
So in its simplest ways. Yes the CRA caused a system failure in checks and balances in lending from groups that were in the federal program or who were trying to get into the program and had to show they were following the rules ahead of time to even be considered.
Now the above is just the tip of the CRA. I am not going to even go into the CRA in its fullest because i doubt you would read it anyway. I sense the presence pseudo neutrality in this thread. It caused a lot of issues and that is pretty apparent to anyone with their eyes open. Оbviously it didnt causе the bundling of sub prime loans. But it was the major reason there was the large supply of these loans to be bundled in the first place.
Cause of the CRA is the failure of liberal theology that all people deserve a house at the expense of everyone else. Yes theology not theory because its turned into a near religious movement that minorities cant be responsible for themselves. Oh and i forgot if you dont believe in the CRA obviously your a racist.
TL;DR. So it solely caused the recession‚ NО. Had a largе part in the fail cascade, YES.
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