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Politics : Liberalism: Do You Agree We've Had Enough of It?
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To: sandintoes who wrote (47738)9/19/2008 1:29:54 PM
From: Geoff Altman  Read Replies (1) of 224657
 
Excellent and truthful article. This part is a must read for all:

The truth is that most of the blame rests on political meddling in the credit decisions of these mortgage lenders.

Twenty years ago the buzz-word in the media was “redlining.” Newspapers across the country were filled with hard-hitting investigative reports about evil and racist mortgage lenders refusing to make real estate loans to various minorities and to applicants who lived in lower-income neighborhoods. There I was closing these loans in the afternoons, and in the mornings offering a counter-argument on the radio to these absurd “redlining” claims. Frankly, the claims that evil mortgage lenders were systematically denying loans to blacks and other minorities were a lot sexier on the radio than my claims that when credit histories, job stability, loan-to-value ratios and income levels were considered there was no evident racial discrimination.

Political correctness won the day. Washington made it clear to banks and other lending institutions that if they did not do something .. and fast .. to bring more minorities and low-income Americans into the world of home ownership there would be a heavy price to pay. Congress set up processes (Research the Community Redevelopment Act) whereby community activist groups and organizers could effectively stop a bank’s efforts to grow if that bank didn’t make loans to unqualified borrowers.

End of story. All the other finger pointing is garbage. One only has to look at a bit of history to know this to be true, if Congress hadn't FORCED lenders to do these exotic loan packages our financial institutions would be doing just fine right now. Congresses response? Instead of admitting they screwed up, they're going to screw up even more by placing blame and hence new regulations where they don't belong.
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