Even if you grant that all the people who bought mortgages because of CRA, or just in general, were scoundrels, and there has been a wealth of material
on sites like The Big Picture, Calculated Risk, and Think Progress to the contrary, it seems to me that at bottom the crisis is not in the mortgages but in the pyramid of bets based on mortgages. And attributing any blame to home buyers, no matter how misguided they were, is utterly beside the point, not to mention odious. > ----- Original Message ----- > From: David B. Shemano > Sent: 10/08/08 05:40 pm > To: Progressive Economics > Subject: RE: Re: [Pen-l] Community Reinvestment Act at fault -- NOT > > Raghu writes: > > >> Excellent. So lets stop blaming the CRA then for subprime mortgages > >> then. At worst, the CRA was ineffective. At best, it helped reduce > >> discrimination in availability of credit for minorities. > > You go too far. The CRA is an example of how the rules of the game were > changed to expand homeownership to people who could not obtain loans > under traditional standards (like the ability ot make a 20% downpayment, > a solid credit history, sufficient income, etc.). So while I agree > nobody forced anybody to make a subprime loan, there was certainly a lot > of political and economic pressure to relax standards, as exemplified by > the CRA. As the unfairly maligned Mr. Liebowitz points outs, companies > like Countrywide that played the new game the best enjoyed the most > applause. > > >> A good case can be made that predatory lending practices were > >> borderline coercive. > >> http://www.hud.gov/offices/hsg/sfh/pred/predlend.cfm > >> > >> In general, poor people are easier to coerce and intimidate than rich > people. > > I would point out the irony of arguing that poor peope don't have the > capacity to understand the mortgage process, but believing the exact same > people are fully capable of owning a home and performing all of the > responsibilities that entails. > > David Shemano > > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l >
_______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
