"Not surprisingly given the higher degree of supervision, loans made under the CRA program were made in a more responsible way than other subprime loans. CRA loans carried lower rates than other subprime loans and were less likely to end up securitized into the mortgage-backed securities that have caused so many losses, according to a recent study by the law firm Traiger & Hinckley"

" Finally, keep in mind that the Bush administration has been weakening CRA enforcement and the law’s reach since the day it took office. The CRA was at its strongest in the 1990s, under the Clinton administration, a period when subprime loans performed quite well. It was only after the Bush administration cut back on CRA enforcement that problems arose, a timing issue which should stop those blaming the law dead in their tracks. The Federal Reserve, too, did nothing but encourage the wild west of lending in recent years. It wasn’t until the middle of 2007 that the Fed decided it was time to crack down on abusive pratices in the subprime lending market."

" Better targets for blame in government circles might be the 2000 law which ensured that credit default swaps would remain unregulated, the SEC’s puzzling 2004 decision to allow the largest brokerage firms to borrow upwards of 30 times their capital and that same agency’s failure to oversee those brokerage firms in subsequent years as many gorged on subprime debt. (Barry Ritholtz had an excellent and more comprehensive <FONT color=#007cd5>survey of how Washington contributed to the crisis
in this week’s Barron’s.)"

Lina,
I recall that we had an extensive argument over this. I don't intent to re-create it again. Suffice it to say that you will have your opinion and I will have mine. And we can agree to disagree.

All I am going to add (and this will be my last post on this subject) is that the primary REASON why many of these financial institutions were even able to make these "unsupervised" loans was because they knew full well that they themselves will not have to carry these unpayable loans on their books. All they need to do is to skim a little bit of the top in loan origination fees and then turn the actual loan over to one of those "motrgage packaging" companies like Merrill Lynch or Bear Sterns, who in turn would sell it as a "derivative" (insured by AIG, no less) to a government guarranteed outfit like Fanny Mae or Freddy Mac.

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Новые фотки - у дочери на дне рождения. 16 лет. Very BIG DEAL !!!

This sceme was very profitable and worked as long as the real estate prices kept going up. In reality this was nothing more than a pyramid, akin to Bernie Madoff, multiplied hundreds of times.


Everyone, who participated in this scam, from bankers, to insurers to bond rating companies to real estate brokers are responsible for this collapse. But it was ENABLED by the Federal Governement by providing easy liquidity for these loans.

In the past no banker in his right mind would give you the money for 30 years if he didn't think he can get that money back. This time, bankers didn't have to worry about getting their money back because it wasn't THEIR MONEY. It was ours.

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Новые фотки - у дочери на дне рождения. 16 лет. Very BIG DEAL !!!

No matter who you blame, who do you think profited from the greatest financial crisis? Do you think I did?
No way. The rich profited not the middle class or the poor. My 401k and my ira suffered. Besides the fact we will have no social security money left when we retire, now even our 401k and Ira will suffer as well. You can thank the rich and the powerful!

Finally, keep in mind that the Bush administration has beenweakening CRA enforcement and the law’s reach since the day it tookoffice.
***
yes!

Shurik, how did rich profited from the crisis? Stop throwing accusations around.

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Хочу лето (или нормальную зиму)

Oleg,
isn't interesting that soon after the TARP money was given out
all the banks that had no money left but what they owe, started to show record profits? I can show you the first qtr 2009 results for Goldman Sachs, B of A, Wells Fargo etc. Manipulation on Wall Street where the Financial firms pushed the stock market to 20 year low to force the mutual fund redemption. Who do you think lost money there? How about your home value? Did you make money?

All I am going to add (and this will be my last post on this subject) is that the primary REASON why many of these financial institutions were even able to make these "unsupervised" loans was because they knew full well that they themselves will not have to carry these unpayable loans on their books.
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Which institutions? Not the CRA banks. "Compared to other lenders in their communities, banks making loans
in their CRA assessment areas (CRA Banks) were less likely to make a high cost loan, charged less for the high cost loans they did make, and were substantially more likely to eschew the secondary market and retain high cost and other loans in portfolio. Foreclosure rates were also lower in metropolitan areas with proportionately greater numbers of bank branches."

***********.reuters.com/article/pressRelease/idUS135259+07-Jan-2008+BW20080107