Eviction

[Gretsch]

How Government Stoked the Mania
"The Community Reinvestment Act (CRA) did the same thing with traditional banks. It encouraged banks to serve two masters -- their bottom line and the so-called common good. First passed in 1977, the CRA was "strengthened" in 1995, causing an increase of 80% in the number of bank loans going to low- and moderate-income families.

Fannie and Freddie were part of the CRA story, too. In 1997, Bear Stearns did the first securitization of CRA loans, a $384 million offering guaranteed by Freddie Mac. Over the next 10 months, Bear Stearns issued $1.9 billion of CRA mortgages backed by Fannie or Freddie. Between 2000 and 2002 Fannie Mae securitized $394 billion in CRA loans with $20 billion going to securitized mortgages."

-Russell Roberts-professor of economics at George Mason University

How Government Stoked the Mania

 

[Sal Paradise]

I read the article and it mentioned a broad range of causes and ended with " beware of doing good with other people's money". But he never gives any specific way in which CRA caused the recession, or even contributed. To me it still seems similar to saying that the highways are too crowded because banks aren't allowed to deny car loans to minorities.


Keep in mind, I don't have an ideological perspective such as Rand to view this through. I think banking should be fair, discrimination should be illegal and home ownership is a good thing.

The only ideological background I really carry into this is the teachings of Jesus and the memories of my Dad caming back from the war and gettingt an FHA loan to buy us a house, otherwise our whole family would have been stuck in a second floor apartment in Brooklyn. It boggles my mind that someone would think that he was doing something wrong there and I don't see the difference . We were low income too. According to wikipedia -

Some legal and financial experts note that CRA regulated loans tend to be safe and profitable, and that subprime excesses came mainly from institutions not regulated by the CRA. In the February 2008 House hearing, law professor Michael S. Barr, a Treasury Department official under President Clinton,[67][113] stated that a Federal Reserve survey showed that affected institutions considered CRA loans profitable and not overly risky. He noted that approximately 50% of the subprime loans were made by independent mortgage companies that were not regulated by the CRA, and another 25% to 30% came from only partially CRA regulated bank subsidiaries and affiliates. Barr noted that institutions fully regulated by CRA made "perhaps one in four" sub-prime loans, and that "the worst and most widespread abuses occurred in the institutions with the least federal oversight".[114]

 

[Sal Paradise]

Okay Sal, it's clear I gave you too much credit. In the worst classic liberal fashion you're attributing things to me that I never said, do not agree with, and you are backing it up with other falsehoods. - Barry


Okay Barry,

Look at your post

So yeah, loaning money to people who can't repay it is generally considered to be a bad economic idea, and playing the "poor minority immigrant" card demonstrates once again the willingness to put a socialist agenda ahead of economic sanity, with the added benefit of labeling people who oppose such ideas elitist, racist, and xenophobic.

You were bashing minorities, immigrants, ( does that include my poor italian grandmother? ) calling people socialist and insane and you were already claiming that you were being labeled elitist, racist and xenophonic. This was before I ever said word one about it.

This is complete and utter bullshit, again, I am not sensitve but jeez - I don't go around throwing bullshit at you and I don't appreciate you doing it to me. That said, I keep in mind, its an internet forum and it is very easy to get into these types of arguments....

 

[Gretsch]

I read the article and it mentioned a broad range of causes and ended with " beware of doing good with other people's money". But he never gives any specific way in which CRA caused the recession, or even contributed. To me it still seems similar to saying that the highways are too crowded because banks aren't allowed to deny car loans to minorities.


Keep in mind, I don't have an ideological perspective such as Rand to view this through. I think banking should be fair, discrimination should be illegal and home ownership is a good thing.

The only ideological background I really carry into this is the teachings of Jesus and the memories of my Dad caming back from the war and gettingt an FHA loan to buy us a house, otherwise our whole family would have been stuck in a second floor apartment in Brooklyn. It boggles my mind that someone would think that he was doing something wrong there and I don't see the difference . We were low income too. According to wikipedia -

Some legal and financial experts note that CRA regulated loans tend to be safe and profitable, and that subprime excesses came mainly from institutions not regulated by the CRA. In the February 2008 House hearing, law professor Michael S. Barr, a Treasury Department official under President Clinton,[67][113] stated that a Federal Reserve survey showed that affected institutions considered CRA loans profitable and not overly risky. He noted that approximately 50% of the subprime loans were made by independent mortgage companies that were not regulated by the CRA, and another 25% to 30% came from only partially CRA regulated bank subsidiaries and affiliates. Barr noted that institutions fully regulated by CRA made "perhaps one in four" sub-prime loans, and that "the worst and most widespread abuses occurred in the institutions with the least federal oversight".[114]

If the “racist urban myth” that the CRA is in part to blame for the collapse we must assume that supporters of this “myth” are either bigots or idiots. Professor Roberts is neither. In addition to being a professor of economics at George Mason he’s a regular contributor to the Wall Street Journal, the New York Times, and a commentator on NPRs Morning Edition. That seems to run the spectrum of ideological viewpoints and I have difficulty believing that any of the aforementioned would invite a bigot into their midst. The continued use of race/class bating is running thin.

I come from a perspective that calls for a fair examination to the works of any author. Some of Rand’s philosophy I agree with, some I don’t. Just because I’ve supported some Objectivist ideas doesn’t mean I have a myopic viewpoint. I think it’s fair to say that I generally support free market economics and you would advocate stricter governance and intervention. At no point have I labeled you a Socialist nor that you see the world exclusively through the eyes of Karl Marx.

Wikipedia is an amalgamation of various facts, falsehoods, and opinions. It can be edited by anyone regardless of academic or professional qualifications. It is not subjected to strict scholarly review and verification. The article quotes Michael Barr at the authoritative proof that the CRA has had no impact on the housing bubble. Barr had a professional interest in absolving the administration that he was a part of. Revisionist historians and political policy makers can and will spin anything to absolve themselves of responsibility for their own mistakes and corruption. A 2000 Federal Reserve report seems to contradict Barr’s findings.

July 19, 2000 Federal Reserve Report on
The Performance and Profitability of CRA-Related Lending​

• 
  By every measure, CRA loans are not as profitable as non-CRA loans.

• 
  No institution reported that CRA lending was more profitable than non-CRA lending for home mortgage, refinance, home improvement, or small business loans.

• 
  For home purchase and refinance lending, three times as many institutions reported their CRA-related loans not profitable as compared to non-CRA-related loans.

• 
  One out of three large institutions report that CRA lending in the home mortgage and refinance markets is not profitable.

• 
  Three times the value of CRA home improvement loans are not profitable as compared to non-CRA loans.

• 
  Delinquency rates for CRA loans in the home purchase and refinance market are twice that for non-CRA loans.

• 
  Among all institutions, about 40 percent of CRA special lending programs are not profitable. For large institutions, 58 percent report that their CRA special lending programs are not profitable. This is inconsistent with the safety and soundness requirements of CRA.

http://www.banking.senate.gov/docs/reports/cra-sun/frb-cra.htm

 

[Kirkus51]

i think it's a good thing that Cities and banks invest in neighborhoods and run down parts of the inner city. The ballpark the Rockies play in has lifted that area into ultra-chic-dom. Good enough to get business involved in the area again. Then the economy goes south. I have no idea if it's hit that area or not. But isn't the idea or ideal of programs like CRA to re-develop depressed areas? And isn't that a good thing?

 

[Sal Paradise]

The continued use of race/class bating is running thin.


At no point have I labeled you a Socialist nor that you see the world exclusively through the eyes of Karl Marx.

Are you and Barry the same person?

When did I say you called me a socialist?

When did I call you or "Professor Roberts" a racist?

Why, in the context of discussing this current banking crisis, would you cite a July 2000 report? Surely there is something newer.

Seriously, I want answers. Or just come off it and admit you want some kind of race/ class/ political fight so I can leave this thread permanently.

 

[Sal Paradise]

You want to hear a startling stat King? 12% of all babies born in the US in the last year were born to illegal parents. Is there any question why pandering to illegals which goes against the grain of any American who believes in the laws of our land, is taking place?
I would love to elaborate but can't out of respect for forum rules.

Ohh an feck you too SpeedChris!!! Dont YOU EVER talk to ME again!!!!

 

[Speed3Chris]

Ohh an feck you too SpeedChris!!! Dont YOU EVER talk to ME again!!!!

Don't feck with me Sal or I won't lend you the crew that cuts my lawn.

 

[Gretsch]

The continued use of race/class bating is running thin.


At no point have I labeled you a Socialist nor that you see the world exclusively through the eyes of Karl Marx.

Are you and Barry the same person?

When did I say you called me a socialist?

When did I call you or "Professor Roberts" a racist?

Why, in the context of discussing this current banking crisis, would you cite a July 2000 report? Surely there is something newer.

Seriously, I want answers. Or just come off it and admit you want some kind of race/ class/ political fight so I can leave this thread permanently.

Sure Sal I can answer your questions. First let me be sure what you're asking here.
"Are you and Barry the same person?"

 

[KingBear]

After a few days being away on business travel I went through this thread and deleted several of my own posts posts which, upon reflection, I found to be distasteful. I often say things I later regret when I respond to individuals instead of actual arguments. In short, stupid people make me stupid too.

Back to the topic...

Today [leader who shall not be named] called out a single political party as being responsible for our economic woes. And isn't that just what our country needs right now - failed economic policies compounded with record deficit spending topped off with meaningless finger-pointing and name-calling? All signs point to a double-dip recession, meaning things will get even worse before they get better. Confidence in our leaders is very low, employers are playing it safe instead of hiring and expanding, and there's a general feeling of apprehension and uncertainty. The bottom line is that the promise of Hope is going right down the shitter right after any expectation of Change. And that may be the saddest thing of all.