Ugh! Co-worker is spouting the meme that the Community Reinvestment Act

[muntrv]

is to blame for the financial meltdown. I said "What about the Graham-Leach-Blilel Act, which allowed banks to put money in the stock market?" He said "Yeah, there was some greed on Wall Street, but these people who took out mortgages are not living within their means."

By the way, I work at a credit union and this co-worker is a loan manager for mortgage lending.

[marmar]

1. Some are thoroughly, hopelessly brainwashed.....

:dunce:

[Robbien]

2. Mortgages are a part of the problem, but a just a very small part

Toxic debt instruments layered on top of mortgages are hundreds of times a bigger problem than bad debt mortgages.

In ponzi schemes, the problem is never the guy at the bottom of the inverted pyramid.

[sandnsea]

3. Oh brother, how many bad loans did your co-worker give?

He was responsible for approving the loans. Is he saying he helped people fraud the system? Lay it right back in his lap.

[muntrv]

6. Our CU didn't participate in the sub-prime lending mess. He was

whining about how at the previous bank he worked, the CRA allegedly stopped it from making aquisitions because they were not complying with the CRA.

[sinkingfeeling]

4. Ask them how many of them have either an ARM, second home mortgage, interest-only or no money down

mortgages. According to everything I've read, these are the ones losing their homes. The Community Reinvestment Act actually stopped these risky-type loans from being issued to low and middle-income families.

Traiger & Hinckley LLP Study Shows CRA Banks Were Substantially
Less Likely Than Other Lenders to Make the High Cost Loans That Helped
Fuel the Foreclosure Crisis

http://www.reuters.com/article/pressRelease/idUS135259+07-Jan-2008+BW20080107

NEW YORK--(Business Wire)--A Traiger & Hinckley LLP study of 2006 mortgage loan data suggests
that the Community Reinvestment Act, a federal law that requires banks
to help serve the credit needs of their local communities, including
low- and moderate-income neighborhoods, deterred banks from engaging
in the kinds of risky lending practices that are provoking the
foreclosure crisis.

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.
**********************************

I know it's hard to confuse coworkers with facts, but ask them to prove their statements.

[Subdivisions]

5. Alex Costellanos said that on Wolfie's CNN Sunday show yesterday. n/t

[chat_noir]

7. Remember this? Bush To Offer Zero Down FHA Loan

by Lew Sichelman January 20, 2004

Thousands of would-be home buyers without any money for a downpayment would be eligible for government-insured financing under a proposal that will be offered by President Bush in his fiscal 2005 budget.

Hailing the "zero down mortgage" as "the most significant initiation by the Federal Housing Administration in over a decade," federal housing officials said the plan to eliminate the normal three percent minimum downpayment will remove the single greatest barrier facing potential first-time home buyers.

"Offering FHA mortgages with no downpayment will unlock the door to homeownership for hundreds of thousands of American families, particularly minorities," Alphonso Jackson, acting secretary of the Department of Housing and Urban Development, said in a statement released in Washington.

According to HUD's projections, about 150,000 would qualify for the new loan in the first year alone.

FHA financing has become increasingly important in recent years as the Bush Administration has tried to increase the number of minority homeowners. He has pledged to create 5.5 million new minorities owners by the end of the decade.

http://realtytimes.com/rtpages/20040120_zerodown.htm

[chat_noir]

8. Flashback: In 2004 Bush Campaigned For Re-Election On The Backs Of Subprime Mortgages

During the 2004 campaign, President Bush declared his pride in making America what he called “an ownership society.” He promoted expanding home-ownership as the best way to ensure a strong economy, campaigning constantly on the idea:

8/28/04: See, I love an ownership society. It’s a hopeful society. It’s a society that provides stability in times of change.

8/9/04: If you own your own home, and building equity in your own home, and you’re changing from job to job, it provides great security and relief.

8/6/04: Home ownership is at an all-time high now in America. That’s fantastic news. Isn’t it wonderful to have somebody for the first time to be able to say: welcome to my home; I’m glad you’re here at my piece of property.


http://thinkprogress.org/2008/09/19/bush-ownership-society/

[sandnsea]

11. If they had offered fixed 30 year mortgages

The zero down wouldn't have been a problem. People can afford the mortgages BEFORE they reset. It's the teaser rates that are the problem, and the balloon in the real estate market itself.

[chat_noir]

9. Bush: Expanding Home Ownership

"This Administration will constantly strive to promote an ownership society in America. We want more people owning their own home. It is in our national interest that more people own their own home. After all, if you own your own home, you have a vital stake in the future of our country." -- President George W. Bush, December 16, 2003

http://www.whitehouse.gov/infocus/achievement/chap7.html


Increasing Homeownership

* The US homeownership rate reached a record 69.2 percent in the second quarter of 2004. The number of homeowners in the United States reached 73.4 million, the most ever. And for the first time, the majority of minority Americans own their own homes.

* The President set a goal to increase the number of minority homeowners by 5.5 million families by the end of the decade. Through his homeownership challenge, the President called on the private sector to help in this effort. More than two dozen companies and organizations have made commitments to increase minority homeownership - including pledges to provide more than $1.1 trillion in mortgage purchases for minority homebuyers this decade.

* President Bush signed the $200 million-per-year American Dream Downpayment Act which will help approximately 40,000 families each year with their downpayment and closing costs.

* The Administration proposed the Zero-Downpayment Initiative to allow the Federal Housing Administration to insure mortgages for first-time homebuyers without a downpayment. Projections indicate this could generate over 150,000 new homeowners in the first year alone.

* President Bush proposed a new Single Family Affordable Housing Tax Credit to increase the supply of affordable homes.

* The President has proposed to more than double funding for the Self-Help Homeownership Opportunity Program (SHOP), where government and non-profit organizations work closely together to increase homeownership opportunities.

* The President proposed $2.7 billion in USDA home loan guarantees to support rural homeownership and $1.1 billion in direct loans for low-income borrowers unable to secure a mortgage through a conventional lender. These loans are expected to provide 42,800 homeownership opportunities to rural families across America.

[dave123williams]

10. The whole 'nothing is ever our fault' crowd. Some philosophy.

[Indenturedebtor]

12. More like "it's always the poor people's fault" crowd

Drives me fucking insane when I see Dems here on this site spouting the same RW meme BS!

Maybe a lot of people can't afford things anymore because their pay has gone DOWN over the last 8 years when adjusted for inflation! DUH!

[ellacott]

13. They did a study and found that many people who were steered into sub-prime loans qualified

for a conventional loan. Some of the people were taken advantage of.

[orwell]

14. The only two people who I knew who lost their houses...

...are both very smart professionals. One owned a computer business, the other is an accountant who makes over 100 G's a year.

They both bought way more house than they should have. When the value fell they walked away.