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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: thames_sider who wrote (89234)	10/8/2008 7:12:49 PM
From: TimF	Respond to of 541931

Blaming the credit crisis on the CRA, and regulation and enfocement of that law, isn't blaming it on poor minority homeowners, but rather blaming it on government legislation and regulation. Also while there are some that would narrowly blame it just on the CRA, with no other thought to anything else, they are in a minority on the right or in any other group I can think of. So its not offensive. Its also not wrong, unless you mean its wrong to just blame the CRA, or to give the CRA a overwhelming share of the blame. The CRA was only part of the problem. Fannie and Freddie, and other government incentives and intervention in the housing market (such as the full deduction in captial gains for most homeowners, but not for other investments) where at least collectively, and in a some cases even individually, a bigger part of the reason for the problems. And then we can't forget the easy money policy from the Fed which was sustained for awhile. But many of the institutions that spurred the massive growth of the subprime market weren't regulated banks. They were outfits such as Argent and American Home Mortgage, which were generally not regulated by the Federal Reserve or other entities that monitored compliance with CRA. "Many" does not equal all. Also many of that "many" where buying mortgages or mortgage backed securities that originated from covered institutions. And the CRA pushed a general relaxation of lending standards, not just for loans that where specifically covered by the CRA.

To: thames_sider who wrote (89234)	10/8/2008 7:31:06 PM
From: Lane3	Read Replies (2) \| Respond to of 541931

there's a consensus emerging that the whole mess should be laid at the feet of Fannie Mae and Freddie Mac, the failed mortgage giants, and the Community Reinvestment Act, a law passed during the Carter administration. I'm sick of these arguments that start with a strawman, an absolute, and then respond by arguing the opposite absolute Let's be honest. When the truth is a bit from column A and a bit from column B. Libertarian? A vote for Barr for me is a variation on none-of-the-above. A bit less passive, depressing.

To: thames_sider who wrote (89234)	10/8/2008 9:31:43 PM
From: neolib	Respond to of 541931

Its amazing how hard it is to find really good statistics by relevant categories on all this. It would be nice to have data with good time resolution on: 1) MEW/HELOC 2) Residential mortgage origination by use category (first residence, vacation, investment, rental, etc) 3) Residential mortgage origination by purchaser type (minority, credit scores, income, etc) 4) Residential mortgage origination by mortgage classification (sub-prime, alt-A, fixed, ARM, documentation type, etc) 5) Data on how the mortgages are held (whole by originator, whole by 3rd party, sliced and diced, etc) 6) Default data. If would be fun to plot the above vs time and see what patterns emerge. My own bet is that it was not 1st time lived in residences (i.e. what CRA pushed) that caused the problem. IIRC, the volume of 2'nd (or more) home buyers exceeded the volume of subprime owner occupied 1'st time home purchasers, and this is what led to both the bubble and its implosion. Speculators walked much quicker (especially the idiots leveraged by multiple houses/condos hoping to flip before the unit was completed) than owners living in their only home. But it is hard to get bulletproof data. Most the editorials don't provide anywhere near the data needed to back up their POV arguments. My argument gets pretty good support simply by looking at the bubble markets (Florida, Vegas, San Diego). The ones that really blew up were driven largely by speculators.