Quote:
Originally Posted by CaptainCrunch
Probably not, the seeds of this economic disaster both in the U.S. and internationally were planted long ago.
Jimmy Carter and the Community reinvestment act lead to the mortgage crisis in 2008.
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A common misconception, but one that isn't true.
From wikipedia (consider the source):
http://en.wikipedia.org/wiki/Causes_...housing_bubble
Quote:
More than 84 percent of the subprime mortgages came from private lending institutions in 2006[7] and share of subprime loans insured by Fannie Mae and Freddie Mac also decreased as the bubble got bigger (from a high of insuring 48 percent to insuring 24 percent of all subprime loans in 2006).[7] The Community Reinvestment Act also only affected one out of the top 25 subprime lenders.[7]
In 2008, Federal Reserve Governor Randall Kroszner, said the CRA wasn’t to blame for the subprime mortgage crisis, stating that "first, only a small portion of subprime mortgage originations are related to the CRA. Second, CRA-related loans appear to perform comparably to other types of subprime loans. Taken together… we believe that the available evidence runs counter to the contention that the CRA contributed in any substantive way to the current mortgage crisis,". Only 6% of subprime loans were handed out by CRA-covered lenders to lower income people (the people the CRA is responsible for, CRA-covered banks can technically lend subprime loans to anyone).[8] Others, such as Federal Deposit Insurance Corporation Chairman Sheila Bair,[9] and Ellen Seidman of the New America Foundation[10] also argue that the CRA was not to blame for the crisis.
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Emphasis added.