PJ Media

You got it right, zanne (32) and Elayne (29).

The CRA, signed into law by Jimmy Carter in 1977 then re-signed and reinvigorated by Bill Clinton, were not only designed to assist and increase minority home ownership, but also to claim and keep beholden to them millions of minorities (potential votes), especially black homeowners who will be forever grateful for helping them become a homeowner.

An excellent expose of CRA written in 2000,
http://www.city-journal.org/html/10_1_the_trillion_dollar.html, explained why CRA is corrupt and should not continue, and correctly predicted an financial disaster. The article’s author wrote, “Under its provisions, U.S. banks have committed nearly $1 trillion for inner-city and low-income mortgages and real estate development projects, most of it funneled through a nationwide network of left-wing community groups, intent, in some cases, on teaching their low-income clients that the financial system is their enemy and, implicitly, that government, rather than their own striving, is the key to their well-being…Even without a no-down-payment policy, the pressure on banks to make CRA-related loans may be leading to foreclosures. Though bankers generally cheerlead for CRA out of fear of being branded racists if they do not, the CEO of one midsize bank grumbles that 20 percent of his institution’s CRA-related mortgages, which required only $500 down payments, were delinquent in their very first year, and probably 7 percent will end in foreclosure. “The problem with CRA,” says an executive with a major national financial-services firm, “is that banks will simply throw money at things because they want that CRA rating.” From the banks’ point of view, CRA lending is simply a price of doing business—even if some of the mortgages must be written off…Looking into the future gives further cause for concern: “The bulk of these loans,” notes a Federal Reserve economist, “have been made during a period in which we have not experienced an economic downturn.” The Neighborhood Assistance Corporation of America’s own success stories make you wonder how much CRA-related carnage will result when the economy cools. The group likes to promote, for instance, the story of Renea Swain-Price, grateful for NACA’s negotiating on her behalf with Fleet Bank to prevent foreclosure when she fell behind on a $1,400 monthly mortgage payment on her three-family house in Dorchester. Yet NACA had no qualms about arranging the $137,500 mortgage in the first place, notwithstanding the fact that Swain-Price’s husband was in prison, that she’d had previous credit problems, and that the monthly mortgage payment constituted more than half her monthly salary. The fact that NACA has arranged an agreement to forestall foreclosure does not inspire confidence that she will have the resources required to maintain her aging frame house: her new monthly payment, in recognition of previously missed payments, is $1,879…Like affirmative action, it robs the creditworthy of the certain knowledge that they have qualified by dint of their own effort for a first home mortgage, a milestone in any family’s life. At the same time, it sends the message that this most important milestone has been provided through the beneficence of government, devaluing individual accomplishment. Perhaps the Clinton White House sees this as a costless way to use the banking system to create a new crop of passionate Democratic loyalists, convinced that CRA has delivered them from an uncaring Mammon—when, in all likelihood, banks would have been eager to have most of them as customers, regulation or no.”

The other culprit to our current worldwide recession and this economic crisis, is Alan Greenspan who continued to lower interest rates to dangerously low levels during his reign at the Federal Reserve. His low interest rates cause the money supply to expand and make money and credit available everywhere.

Alan Greenspan, Jimmy Carter and Bill Clinton started this mess, and then the likes of Barney Frank and Chris Dodds who refused to fix it a few years ago, are also to blame. Shame on all of them.