“Yet the FDIC has turned up the heat on Petrucelli’s bank, giving it an apparently rare “needs to improve rating,” for not making more risky loans under the Community Reinvestment Act.”
Yes Virginia, the Community Reinvestment Act Really Did Help Cause the Housing Boom and Bust
Older post: Fannie Mae tightens lending standards for condos
Newer post: USAToday.com on Scottsdale, Arizona vacation homes
{ 3 comments… read them below or add one }
Richard 03.22.09 at 1:35 am
I’m convinced that while many comment on the CRA, few really know what
they…. I suggest for a brief, readable source check out “The Big Picture” by Barry Rithholz and search “CRA” - click on “More CRA Idiocy.” Recently
read (somewhere) that a recent FDIC analysis of CRA found that in targeted neighborhoods, only 6% of the loans were CRA loans. Perhaps it was the other 94% of the loans in those areas that were the problem. Just a thought. Actually other analysis of ‘actual’ CRA loans shows them to
perform very well.
Richard 03.22.09 at 2:15 am
My bad. Hadn’t read the sourced article B4 the previous comment.
But now that I’ve read it, what a terrible example. No logical analysis involved here. “How many…knuckled under…started handing out mortgages to whomever,” shows a tragic lack of understanding of CRA. IMO, this guy’s an idiot. For credible sources try “Calculated Risk” or “Housing Wire.” I don’t doubt that some confusion has been created by some “lenders’ trying to scapegoat their own greed by suggesting that CRA “made me do it.” Since most don’t understand CRA, they tend to believe whatever. Greed and fraud covers it for me - not CRA.
Richard 03.22.09 at 2:29 am
Time to get off my high horse, and lighten up. Highly recommend - if
you haven’t seen this, to check it out. Go to Youtube and search for
“Tarp Song” and ENJOY. I don’t do embedding (yet). Sorry