Sunday, September 28, 2008

Frankly Speaking

The Globe's Jeff Jacoby lays blame where blame belongs for the subprime mortgage mess.

1 Comments:

Anonymous randal said...

The pressure to make more loans to minorities (read: to borrowers with weak credit histories) became relentless. Congress passed the Community Reinvestment Act, empowering regulators to punish banks that failed to "meet the credit needs" of "low-income, minority, and distressed neighborhoods." Lenders responded by loosening their underwriting standards and making increasingly shoddy loans.

All this was justified as a means of increasing homeownership among minorities and the poor. Affirmative-action policies trumped sound business practices. A manual issued by the Federal Reserve Bank of Boston advised mortgage lenders to disregard financial common sense. "Lack of credit history should not be seen as a negative factor," the Fed's guidelines instructed. Lenders were directed to accept welfare payments and unemployment benefits as "valid income sources" to qualify for a mortgage. Failure to comply could mean a lawsuit.


Who's been telling you all along that "Liberalism killed the mortgage"?

Great article, G.

September 29, 2008 at 12:59 AM 

Post a Comment

Subscribe to Post Comments [Atom]

Links to this post:

Create a Link

<< Home