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Originally Posted by - Jesus Christ -
If you actaully read that document and place any major level of blame on the CRA you are a complete moron.
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Rather than personal insults, perhaps we could simply discuss the subject like the tolerant intelligent adults that we hold ourselves to be.
If you look at this statement in the paper:
"Contrary to some media commentary, there is no evidence that the Community Reinvestment Act was responsible for encouraging the subprime lending boom and subsequent housing bust. This Act only applies to depositories, and did not cover most of the important subprime lenders. Depositories showed a lesser tendency
to write subprime loans than lenders not subject to the Act (Yellen 2008)."
This statement completely ignores the reality that those subprime lenders, that the act did not apply to, subsequently sold their paper on to larger lenders to whom the act DID apply. Therefore the affects of the act were passed on through the market. Also, even if as much as half of the subprime loans were made by non-CRA lenders (which is the highest statistic quoted by anyone), that still leaves 10s of billions of dollars in loans made directly by CRA lenders that were defaulted on.
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