Quote Originally Posted by Devils Horse View Post
Wrong as usual.

Barney Frank and affirmative action were huge factors. Read the whole article. Mr. Frank insisted Fannie and Freddie were in groovy shape back when the Bush admin was trying for tighter regulations.

Frank's fingerprints are all over the financial fiasco - The Boston Globe
For every OP/ED article that points to the Community reinvestment act of 1977 as the source of the subprime leanding crisis there are two that point to banking decisions for the collapse. The 1977 act only required banks from declining loans based soly on geographic location of property.

Much of the evidence supporting the 1977 Reinvestment act only had a minimal impact on the housing collapse is that the overal forclosure rate in areas that were onced redlined properties were no higher than the general forclosure rate. The subprime mortgage collapse was widedspread and involved most all types of loans, from $1,000,000.00 properties to $35,000.00 starter homes.

The fact that Fannie Mae and Freddy Mac purchased these subprime loans and there by encouraged making these loans is true. However, much of the risks were not disclosed by the institutions making these loans. Inaccurate appraisals, undocumented finacial statements at origination and ARM mortgages that would be unmanigable based on maximum rates.

Banks and large mortgage brokers saw an opportunity to make big $$$ in origination fees and points and simply wrote as many loans as they could with as little effort as possible. Over 90% of subprime loans were sold as securities. The Mortgage brokers made their money in the origination fees.