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Do you think Congress requiring banks to make loans easier for minorities and immigrants hurt the US banking and housing industry?

Fannie Mae and Freddie Mac, the failed mortgage giants, and the Community Reinvestment Act, a law passed during the Carter administration, have they hurt the housing and banking industry? The CRA, which was amended in the 1990s and this decade, requires banks to make more efforts to do so. These efforts include waving credit checks and proof of employement. All this in order to meet a quota set by Congress for bansk to be given ratings of being 'minority friendly'. If they were not making these loans. These banks became target of minority groups.

Answer Question

Asked by Anonymous at 8:29 AM on Feb. 15, 2010 in Politics & Current Events

Answers (30)

    Answer by LoriKeet at 8:38 AM on Feb. 15, 2010

  • No doubt about it! Home ownership is NOT for everyone--some people don't make enough money, or they're not stable/responsible enough (as reflected in their credit scores). In the name of "fairness" AKA social reengineering, the Libs wanted EVERYONE to have a home (they're ENTITLED to one, doncha know) and now we're experiencing the fallout from it.

    But then the banks did get kinda stupid on their own and started loaning people more money than the should have. Those people WERE capable of home ownership, but should have been buying only say a $200K home, but instead, the bank did some creative terms and got them into a $350K home instead on an adjustable ARM loan. Greedy. Now that the loans have and are continuing to reset, these people can't afford the monthly payments anymore. So between greed and making sure that EVERYONE can own a home who shouldn't, it's made for a scenario that screws those of us who are responsible.

    Answer by Anonymous at 8:39 AM on Feb. 15, 2010

  • That seems crazy to me. Credit checks are about numbers not skin color. If you can't pay your bills, you can't afford a loan.

    Answer by Farrahann at 8:48 AM on Feb. 15, 2010

  • Farrahann, unfortunately banks were pressured by Congress/CRA (both Clinton and Carter) to increase the number of loans they made. This pressure included making loans more 'accessible' and 'losening' restrictions. Add to that Bush's minority/amnsety inititatives. (One of the key areas he lost my 04 vote)  Despite some bipartisan, mostly Republican efforts to tighten up these programs~they were halted by the Democrats in majority of Congress. Many Democrats fail to acknowledge this because Barney Frank is head of the oversight committee who continued to defend the actions of the banks. He even brought minority leaders to testify how great the program was working to give minorities the "American Dream".  This is another government intervening social entitlement issue that went horribly down hill and is costing Americans dearly. African Americans and Illegal Foreclosures are among the highest % of foreclosures.


    Answer by grlygrlz2 at 9:04 AM on Feb. 15, 2010

  • Yes.

    Answer by mancosmomma at 9:05 AM on Feb. 15, 2010

  • Absolutely. Government involvement in the free market is a huge problem in many areas. Healthcare is another area.

    Answer by Carpy at 9:09 AM on Feb. 15, 2010

  • That's part of the problem.

    Answer by PhoenixFire at 9:33 AM on Feb. 15, 2010

  • Predatory lenders and uneducated borrowers is what hurt the housing industry. I had a lender who could get me approved for a $75,000 mortgage program but had trouble getting me approved for $65,000. I knew I couldn't afford the $75,000 but he kept pushing. When I did a refi, they sent someone to my house that spoke as fast as an auctioneer. What I thought I signed as a 3 yr arm, turned out to be a 2 yr arm. These kinds of practices is what hurt the industry.

    Answer by motherofhope98 at 9:34 AM on Feb. 15, 2010

  • It's probably not helping, although deregulation of the banking industry during the Clinton Admin., and which was supported by republicans, has had the biggest impact because the banking and insurance industries are much more closely tied to the stock market, which means any downturn there directly affects them. The Reagan Administration deregulated the Savings and Loan industries in the 1980's and that resulted in the Gov. later having to bail them out of their mess to the tune of 500 Billion.

    Answer by meriana at 9:38 AM on Feb. 15, 2010

  • 'having to' not quite

    Answer by Anonymous at 9:45 AM on Feb. 15, 2010

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