The main point of CRA was to stop the practices such as redlining -- refusing to make loans for properties in certain areas (or for applicants of color), no matter how good the applicant's credit was.
The main point of deregulation was to let bankers and brokers be as clever as they could be with securities, including mortgage-based securities and mixed bags of securities, credit-debit swaps, etc. They predictably out-clevered themselves, as they did in 1929.
I would like to see documentation for your contention that ACORN forced banks to take on bad risks. The CRA didn't force banks to disregard reasonable ways of assessing a loan applicant's likely ability to pay.
My take on it is, once banks didn't have to hold on to the mortgages they wrote, any loan officer who didn't write all the mortgages he could was a damned fool. In the short term, they'd be money for him; in the long term, they'd be Somebody Else's Problem. It turned real-estate loans into an extractive industry like logging or whaling, where it can be shown that absent regulation the winners will be those who quickly get in, grab all they possibly can, and get out. The "losers" are left holding bad securities. The real losers (we taxpayers) are bailing out the "losers," some of whom are paid more per hour than I am per year.
no subject
The main point of deregulation was to let bankers and brokers be as clever as they could be with securities, including mortgage-based securities and mixed bags of securities, credit-debit swaps, etc. They predictably out-clevered themselves, as they did in 1929.
I would like to see documentation for your contention that ACORN forced banks to take on bad risks. The CRA didn't force banks to disregard reasonable ways of assessing a loan applicant's likely ability to pay.
My take on it is, once banks didn't have to hold on to the mortgages they wrote, any loan officer who didn't write all the mortgages he could was a damned fool. In the short term, they'd be money for him; in the long term, they'd be Somebody Else's Problem. It turned real-estate loans into an extractive industry like logging or whaling, where it can be shown that absent regulation the winners will be those who quickly get in, grab all they possibly can, and get out. The "losers" are left holding bad securities. The real losers (we taxpayers) are bailing out the "losers," some of whom are paid more per hour than I am per year.