KnowYourPro

This blog was originally published on Mortgages Unzipped, 12/03/2008.


A while ago, I wrote a blog about how poor people and certain ethnic groups were being blamed for our current mortgage crisis. ( http://www.zillow.com/blog/mortgage/2008/09/26/glenn-beck-blames-housing-crisis-on-lending-to-minorities/ ) For some strange reason, people felt more comfortable blaming this disaster on one or two small groups of CONSUMERS rather than actual culprits- banks, mortgage companies, investors, deregulation cheerleaders, those sorts of people. Yes, it made sense forsome to say that The Community Reinvestment Act of 1977 (And expanded by... gasp! Bill Clinton!) was the real problem. In other words, if we didn't have to lend to those "pesky, inner-city folk", this mess never would have happened.

Well, I have to tell you, if you believe that to be true, you would be incorrect.

http://www.reuters.com/article/bondsNews/idUSN0332633420081203

This just came out today, and it follows remarks of some people some might consider to be 'in the know'. Echoing what I have said on this blog and others, it does show that the assumptions made by a few people are flat out wrong.

But don't take my word for it, read for yourself.

And, if you were one of those who wanted to blame everything on the CRA, ask yourself why? Why did you want so badly to say that the number one reason we are suffering so much is because of "THEM"? Was it because we have a natural instinct to get ourselves as far away from responsibility as possible??? I hope not. But I hope we can stop this distraction and divisiveness and get to the root of what actually happened here so that it never happens again. If we continue to blame the wrong 'things' and the wrong people, well, do you really want to know what happens???

Stop this bitter argument in it's tracks- it has no merit, and it is based on false pretenses. Period.

Quick addition here- the Community Reinvestment Act is still alive and well. It makes sure that lenders service each sector of the communities they serve. The largest and most unscrupulous mortgage companies WERE NOT BANKS and therefore did not fall under any CRA regulation. Ameriquest, New Century, Long Beach, Lehman Brothers- the list goes on. I was recently involved in an 'argument' of sorts with yet another Glenn Beck listener who believes the CRA caused the credit crisis. I don't know how much more clear I need to make this. IT IS A FLAT OUT LIE. The dishonesty needs to stop.