re: #572 subsailor68

Hi garhighway. I don’t think anyone posited the notion that banks (or non-banks) issued mortgages to a person who had no job, so that may be a bit of a straw man. However, here’s one article on the ability of the CRA to “encourage” compliance:

Business Insider

And the article does cite a specific example - the Shawmut National Corporation and its dealing with the Fed under CRA.

As Obdicut noted above, CRA wasn’t the prime problem with toxic mortgages, but certainly was at least part of the overall issue.

;-)

Yesterday, in a thread here, someone posited exactly that.

My best understanding of the residential mortgage crisis is that it was primarily fueled by non-bank lending (Countrywide, New Century, and the like) that was securitized onto the books of the big houses as RMBS’s. I have seen nothing from any credible economic source that indicates that the crap paper that blew up Bear, Lehman, Merrill and Citi (and which, coupled with Paulson bungling the Lehman failure caused the freeze in the credit markets in 9/08, the initiation of TARP, and what followed) was based on bank-originated mortgages. It was non-bank (and therefore non-CRA) paper.

I leave out of this the Fannie and Freddie debacles, which I believe had their own distinct origins.