Community Reinvestment Act to blame? Please.

[Ma'ake]

Responsible lending to minorities & the underprivleged:

http://www.nytimes.com/2008/09/27/ny...in&oref=slogin

Creation of grotesquely irresponsible financing products for mortgages (ARM, interest only loans, etc) - financial institutions, not Barney Frank.

http://bigpicture.typepad.com/commen...erstandin.html

(And I won't even address the coffee insults. Shame!)

[exUte]

Originally Posted by Ma'ake

Responsible lending to minorities & the underprivleged:

http://www.nytimes.com/2008/09/27/ny...in&oref=slogin

Creation of grotesquely irresponsible financing products for mortgages (ARM, interest only loans, etc) - financial institutions, not Barney Frank.

http://bigpicture.typepad.com/commen...erstandin.html

(And I won't even address the coffee insults. Shame!)

ARMS, interest only loans made for. The vast majority: middle and lower income homeowners who couldn't afford to buy a home without those incentives. Where have you been living?

The same people who say they were duped by the banks and mortgage companies on something pretty straightforward, are now expected to become intelligent when voting for president? Same folks. Same results. Disaster. I hope I'm wrong.

[minn_stat]

Originally Posted by Ma'ake

Responsible lending to minorities & the underprivleged:

http://www.nytimes.com/2008/09/27/ny...in&oref=slogin

Creation of grotesquely irresponsible financing products for mortgages (ARM, interest only loans, etc) - financial institutions, not Barney Frank.

http://bigpicture.typepad.com/commen...erstandin.html

(And I won't even address the coffee insults. Shame!)

I only read to where he wrote

• The four biggest problem areas for housing (by price decreases) are: Phoenix, Arizona; Las Vegas, Nevada; Miami, Florida, and San Diego, California. Explain exactly how these affluent, non-minority regions were impacted by the Community Reinvesment Act ?

He lost credibility with me at this point.

Miami, FL is an affluent, non-minority region? When did he last visit Miami? 1950? According to the 2000 census, Miami is 65.8% hispanic and 22.3% black - a total of 88.1% of the residents are minority, without even counting other, smaller minorities.

Compare that, say, with Minneapolis (the city in Minnesota with the largest minority concentration) - 7.6% hispanic and 18.0% black for a total of 25.6% minority. Phoenix is at 39.2% (34.1% + 5.1%), Las Vegas is at 34.0% (23.6% + 10.4%), and San Diego at 33.3% (25.4% + 7.9%).

[exUte]

Originally Posted by minn_stat

I only read to where he wrote



He lost credibility with me at this point.

Miami, FL is an affluent, non-minority region? When did he last visit Miami? 1950? According to the 2000 census, Miami is 65.8% hispanic and 22.3% black - a total of 88.1% of the residents are minority, without even counting other, smaller minorities.

Compare that, say, with Minneapolis (the city in Minnesota with the largest minority concentration) - 7.6% hispanic and 18.0% black for a total of 25.6% minority. Phoenix is at 39.2% (34.1% + 5.1%), Las Vegas is at 34.0% (23.6% + 10.4%), and San Diego at 33.3% (25.4% + 7.9%).

masses that obviously aren't documented.

[Ma'ake]

I only read to where he wrote


Quote:
• The four biggest problem areas for housing (by price decreases) are: Phoenix, Arizona; Las Vegas, Nevada; Miami, Florida, and San Diego, California. Explain exactly how these affluent, non-minority regions were impacted by the Community Reinvesment Act ?

He lost credibility with me at this point.

Miami, FL is an affluent, non-minority region? When did he last visit Miami? 1950? According to the 2000 census, Miami is 65.8% hispanic and 22.3% black - a total of 88.1% of the residents are minority, without even counting other, smaller minorities.

He may have missed on that particular point, but those areas had ridiculous price inflation, the definition of a bubble, with or without minority borrowers. Who believes the predominant number of problem mortgages were granted to minorities?

As near as I can tell, the conservative explanation of the problem goes something like this:

1. Barney Frank & Co pushed lenders to lend to minorities via the Community Reinvestment Act.

2. Said lenders, due to pressure from the Community Reinvestment Act, created fundamentally unhealthy financial "products". The resulting toxic mortgages weren't really the fault of the lenders, who were merely trying to comply with the CRA by whatever means they could.

Does anyone really believe this simplistic explanation?

It's like Glenn Beck today saying the $700B bailout hasn't put a dent in inter-bank lending because the magnitude of the effort has created fear among the institutions. It's called "de-leveraging", Glenn - the banks are desperately hording capital/cash to improve their balance sheets.