Originally Posted by Craven Morehead

There is the Community Reinvestment Act which I believe was enacted in the late 70s to prevent banks from redlining, or not lending within certain areas of their market area (essentially to avoid racial discrimination, if they take deposits there, they better loan, as well). That Act was strengthened in the late 80s or early 90s to make it easier for anyone to obtain a mortgage. That was the beginning of this. Fannie and Freddie got behind it and promoted the hell out of this type of lending. The thought was that everyone has the right to own a home. Property values are ever increasing, right? What could go wrong? Well, in short, everything.

In a sense, it was too much banking regulation that caused the problems in the US, not too little. Bankers, when they had skin in the game and held the mortgage, wouldn't have made any of the 0 -10% down payment loans that were made on inflated appraisals.

Ah ha! Here's a video on what I just posted



I will admit blaming the CRA is a highly political issue. There are other YouTube videos that get much more into that aspect. This one does a pretty good job of presenting the facts. The initial CRA was needed. The subsequent changes in my opinion were dangerous and are the root cause for our present condition.