Misplaced blame for credit crisis
The 1977 Community Reinvestment Act (CRA) cannot be blamed for the current economic crisis. The act prevented redlining and encouraged federally regulated banks and thrifts to help meet the credit needs of the communities they served. CRA loans also helped low- and moderate-income families buy high quality homes of lasting value that remained affordable. The act was strengthened in 1995 and severely weakened in 2005.
Unregulated mortgages during the housing boom caused the economic crisis. Rep. Barney Frank, chairman of the House Financial Services Committee, stated, “Most high-cost loans were originated by lenders that did not have a CRA obligation and lacked federal regulatory oversight.” Michael S. Barr, a Clinton Treasury Department official, testified before Congress in 2008 supporting Congressman Frank’s assessment. According to Barr, 50 percent of sub-prime loans were made by mortgage service companies not subject to comprehensive federal supervision; another 30 percent were made by banks or thrifts not subject to routine supervision or examination. How can CRA, Fannie or Freddie be held responsible for these sub-prime loans?
Did the CRA, or any other legislation, require banks to ignore income, credit scores, assets or payment history of mortgage applicants? Did the CRA, Fannie, and Freddie sanction “no money down mortgages”?
Were banks required by Congress to combine a first mortgage with a down payment consisting of a home equity line of credit?
Phoenix, Las Vegas, Miami and San Diego are major housing problem areas in terms of decreasing value. How can these affluent, non-minority regions be impacted by CRA?
Did the CRA force banks to make “interest only” loans?
Were “negative amortization loans” part of the legislative requirements?
Finger pointing and incendiary rhetoric are counterproductive. The pointed finger pushes the thumb up and makes the other three point toward the accuser.
ó Reginald W. Brown
Salisbury
Political stings
Democrats remind me of fire ants. They build an impressive nest, sting you, leave large boils that take forever to get rid of, then leave a permanent scar.
Wake up America, our country is being stung. We don’t need this kind of arrogance, dangerous or fanatical connections, large contributions from foreign countries, nor promises that change with the wind.
I encourage you to get out and vote to let the biased media, Hollywood, foreign countries and those conducting voterregistration fraud know that we, the American people, will control our own election, determine our own future, and the direction in which we want America to move.
ó Mary Forbes
Salisbury