Frankly Speaking
The Globe's Jeff Jacoby lays blame where blame belongs for the subprime mortgage mess.
posted by Spencerblog at
10:37 PM
Sunday, September 28, 2008
posted by Spencerblog at
10:37 PM
RSS Feeds© Copyright The Delaware County Times, a Journal Register Property. All rights reserved | Our Publications | About Our Ads | Privacy Policy/Terms of Service
1 Comments:
The pressure to make more loans to minorities (read: to borrowers with weak credit histories) became relentless. Congress passed the Community Reinvestment Act, empowering regulators to punish banks that failed to "meet the credit needs" of "low-income, minority, and distressed neighborhoods." Lenders responded by loosening their underwriting standards and making increasingly shoddy loans.
All this was justified as a means of increasing homeownership among minorities and the poor. Affirmative-action policies trumped sound business practices. A manual issued by the Federal Reserve Bank of Boston advised mortgage lenders to disregard financial common sense. "Lack of credit history should not be seen as a negative factor," the Fed's guidelines instructed. Lenders were directed to accept welfare payments and unemployment benefits as "valid income sources" to qualify for a mortgage. Failure to comply could mean a lawsuit.
Who's been telling you all along that "Liberalism killed the mortgage"?
Great article, G.
Post a Comment
<< Home