Mr. Blumer is simply disingenuous when he blames the mortgage crisis on the Community Reinvestment Act. The Act did not require banks or other lenders to revise their lending standards, it only said that it was illegal to categorically refuse to lend in certain areas (red-lining). I would like Mr. Blumer or any other critic of the Community Reinvestment Act to show us even one example of a loan that was made to an otherwise ineligible borrower because of the CRA.
Now – Fannie and Freddie certainly did contribute to the mess because they were more than happy to buy up the junk that the lenders were peddling. At the same time, no lender would say they wished Fannie and Freddie hadn’t existed, as they served as useful idiots, taking on mortgages that the lenders should have kept on their own books.
