Barney Frank

[Jones]

If you would have read it they did point to the regulations enacted that required banks to comply with the CRA in order to be approved for regulatory activity. Someone posted a video on this thread of Clinton speaking about these regulations. I'd suggest if you were interested in the truth to read up on those regulations before you take on Cato.

Requiring banks to comply with the CRA is not the same as requiring banks to make loans to high risk individuals because there is nothing in the CRA regulations that requires banks to make loans to high risk individuals. If you think there is then quote it for us, if you can do that I would certainly concede the point.

CRA loans by definition are subprime loans. That is the point.

No they are not. A subprime loan is a high interest loan given to an individual who does not qualify for the prime rate. CRA loans were loans made in lower class and minority neighborhoods that had previously been redlined. Some were subprime and some were not, it depended on the individual and whether or not they qualified for the prime rate.

When you start forcing banks through regulation to not require things like creditworthiness or a 20% downpayment or even to make loans in risky areas they default at higher rates. When the government offers a guarantee on a loan that is no different than the government making that loan.

Once again there were never any regulations forcing banks to do these things, if you can find them please quote them.

It's also worth nothing that the CRA regulations only applied to FDIC insured banks and not to the private lenders like Countrywide who were making the making the majority of subprime loans. These private lenders were under no government pressure to offer subprimes yet they made them a core part of their business model because they were so profitable.

 

[island1fox]

Jones,

I am sure you have not heard of Janet Renos war on "red lining"

Turning down anyone that could not demonstrate they could re-pay.

June 1994 acorn/obama vs Citybank ---not enough minority loans.

 

[Jones]

Jones,

I am sure you have not heard of Janet Renos war on "red lining"

Turning down anyone that could not demonstrate they could re-pay.

June 1994 acorn/obama vs Citybank ---not enough minority loans.

Island,
Red lining does not refer to turning down individuals who cannot re-pay it refers to not offering loans in specific neighborhoods, ie, turning applicants down based on where they live rather than on their credit history. That's the type of practice that the CRA was intended to address.

 

[av8torntn]

No they are not. A subprime loan is a high interest loan given to an individual who does not qualify for the prime rate. CRA loans were loans made in lower class and minority neighborhoods that had previously been redlined. Some were subprime and some were not, it depended on the individual and whether or not they qualified for the prime rate.


Once again there were never any regulations forcing banks to do these things, if you can find them please quote them.

.

I see what you are doing now. Funny.

Your only definition for a subprime loan is interest. If you use any reasonable means to define what a subprime loan is your argument would not work.

We have made, and continue to make,significant adjustments to our mortgageloan sourcing and purchase strategiesin an effort to meet these increasedhousing goals and the sub-goals. Thesestrategies include entering into somepurchase and securitization transactionswith lower expected economic returnsthan our typical transactions. We havealso relaxed some of our underwritingcriteria to obtain goals-qualifyingmortgage loans and increased ourinvestments in higher-risk mortgagesthat are more likely to serve the bor-rowers targeted by HUD’s goals andsubgoals, which could increase ourcredit losses.
—Fannie Mae 10-K, May 2, 2007

In the real world all the money that was floating around came from the government.

Subprime lending started off as a good idea – helping Americans buy homes who couldn’t previously afford to.-Barak H. Obama 2007

there is nothing in the CRA regulations that requires banks to make loans to high risk individuals

Once again if a bank wanted to grow it had to show that it complied with the CRA regulations. 12 U.S.C.A. ßß 2902(3) and 2903. The CRA exists to force banks to make loans that are a little more risky. The Boston Fed did a study that showed that your redlining was basically non existent so there is no way that could be the reason for the CRA.

Here the HUD secretary bragging of forcing banks to make risky loans. I would qualify these as subprime even though the government buys these loans to keep the interest rate lower than the market would normally bear. I fully understand that you want as narrow as possible of a definition for a subprime loan to make your case.

Andrew Cuomo: CRA Should be Abused to Force Banks to Give Risky Loans - YouTube!

 

[trplnkl]

TRP,

I think we can agree that MILLIONS of people bought homes that they couldnt pay for. It was really easy. You get a realtor with a buddy in the mortage writing business, an appraiser who will give whatever price is asked, a lender who wont check anything and presto..... a new homeowner.

Here is so cal, i deliver to a very affluent neighborhood. At one time in 2007, homes were at 1 million dollars. They were selling faster than they could be built. It was easy, just take a 10 year interest only loan at 3500 a month and before the tenth year, you could sell it for 1.8 to 2.0 million.

That was the selling points of the realtors. APPRECIATION RATES. They were double digits for 5 years. How could they lose?

Like any investment, there are risks, but when it came to the housing bubble, everyone from the realtor to congress ignored the warning signs. BUSH called for more homes, more buyers, lower standards.

When it was that easy, why would people NOT buy?

Everyone gambled. Everyone took advantage instead of looking forward. GREED took hold. Nobody was exempt from greed.

I see people all day long who are moving out with the Marshall standing there. Its a sad site, but the system made it that easy.

The real problem today isnt how it got started, but how to fix it? As I said, the worst isnt over yet. There is plenty more hurt to come. I heard Romney recently talking about the housing crisis and his idea of fixing it was to give people jobs.

Thats ridiculous. That isnt the problem. Giving people jobs isnt going to make a mortgage that went from 2500 a month to 5000 a month.

What is needed, is to rewrite all loans to their current values and adjust interest rates. Those people with jobs who bought a home at 979K and now the home is worth 500K will make payments on that home if its lowered from the ridiculous price that it was valued at when purchased.

Everyone knew the homes were overpriced from the jump, but nobody cared as long as all the pockets were getting greased.

Peace

[h=2][/h]

Originally Posted by trplnkl
By this, so you mean people buying homes they knew they could not pay for?



​

So, you typed all that to answer yes.

Not everyone is driven by greed. I for one could have bought a huge high dollar house at that time, but I didn't. I heard the talk about playing the system and making big bucks. I recognized the short comings of zero downpayment, variable interest rates and the other so called incentives and I'm no financial guru by any means. I did buy a place during that time with the intentions of flipping if I didn't decide to live there. I sold it a few months ago at a modest profit. I didn't use any government backed loan to buy the place. My thinking was, if I had to use government help to buy a house I would continue to rent. It's called personal responsibility. I know you call that term "right wing talking points" but I knew the term and it's meaning long before I knew the difference in republican and democrat.

 

[Jones]

Your only definition for a subprime loan is interest. If you use any reasonable means to define what a subprime loan is your argument would not work.

That's not my definition, its the financial world's definition:

A type of loan that is offered at a rate above prime to individuals who do not qualify for prime rate loans.

Read more: Subprime Loan Definition
​

That's what everyone else means when they talk about sub prime loans. If someone is making up definitions to fit their arguments, it's not me

You didn't provide a link to the Boston Fed study you cited so I had to google it. Not sure if this is the one you're talking about:

But these factors do not wholly eliminate the disparity, since the adjusted
ratio implies that even after controlling for financial, employment, and
neighborhood characteristics, black and Hispanic mortgage applicants in the
Boston metropolitan area are roughly 60 percent more likely to be turned down
than whites. This discrepancy means that minority applicants with the same
economic and property characteristics as white applicants would experience a
denial rate of 17 percent rather than the actual white denial rate of 11
percent. Thus, in the end, a statistically significant gap remains, which is
associated with race.

FYI - The CRA was passed in 1977 and that study was done in 1992 so even if it did show that redlining was non-existent that would be evidence that the CRA was working as intended, at least in the Boston area which was the only area that study looked at.

I'm still waiting for someone to quote the CRA regulations that forced banks to make loans to high risk individuals, or link to some empirical data showing that CRA subprime loans defaulted at a significantly higher rate than non CRA subprime loans.

 

[The Other Side]

So, you typed all that to answer yes.

Not everyone is driven by greed. I for one could have bought a huge high dollar house at that time, but I didn't. I heard the talk about playing the system and making big bucks. I recognized the short comings of zero downpayment, variable interest rates and the other so called incentives and I'm no financial guru by any means. I did buy a place during that time with the intentions of flipping if I didn't decide to live there. I sold it a few months ago at a modest profit. I didn't use any government backed loan to buy the place. My thinking was, if I had to use government help to buy a house I would continue to rent. It's called personal responsibility. I know you call that term "right wing talking points" but I knew the term and it's meaning long before I knew the difference in republican and democrat.

TRP,

Surprisingly we agree. It should have been about personal responsibility, but it was too easy. In the video I posted, BUSH, near the end of the video says "one more barrier to home ownership is bad credit, and we need to remove that barrier and allow people with bad credit to buy a home cause people with bad credit should have as nice a home as you do!"

When the president of the United States makes such a statement, people dont use personal responsibility in their thought process.

I too could have taken out a loan for a home here when they were built, as my wife pushed me to look at them. 4800 square feet, 879K and 5 bedrooms. She wanted a bigger home and with a ten year interest only loan, we could have afforded this home at 3679.00 a month. Her goal was to stay in the home for 5 years, flip, take the profit and buy a similiar home in another area with enough cash to put 50% down.

I knew things were not going to be rosy down the road and we did not buy the house. Today, that track of homes if 60% vacant! The prices are down to 485K and nobody wants them. Foreclosure signs are on every other garage.

It was all about mindset and personal responsibility. You are correct.

In addition, the next biggest factor to the housing collapse was the intense promotion of equity line loans. From 2003 through 2007, solicitations for these loans were in the mailbox everyday. Television was flooded with ads for equity lines. People foolishly took out these loans to buy extravagant things like motorhomes, motorcycles, cars, boats, jet skis and such.

Here, there are people who walked away from million dollar homes and are now living in their motorhomes. The local walmart supercenter allows these motorhomes to park there overnight and right around 10PM it looks like a trailer park.

In my parts, it was about greed and foolish thoughts. When the system made it too easy to buy, default and walk away, we were all doomed.

Thanks for the debate.

Peace.

 

[av8torntn]

That's not my definition, its the financial world's definition:
That's what everyone else means when they talk about sub prime loans. If someone is making up definitions to fit their arguments, it's not me

But you guys ignore that the government is subsidizing the interest rates. If you take what would normally qualify to be a prime loan 20% downpayment, verifiable income, 740 credit score, verifiable home value, etc. you would have many more. You call a HUD loan a prime loan but it really isn't. Like I said you have to take an extremely narrow view to make your argument. Someone(those that pay taxes) are paying the higher interest rate as they default.

I'm still waiting for someone to quote the CRA regulations that forced banks to make loans to high risk individuals, or link to some empirical data showing that CRA subprime loans defaulted at a significantly higher rate than non CRA subprime loans.

12 U.S.C.A. ßß 2902(3) and 2903 - That's the third time I posted this for you. CRA subprime loans are what I am talking about. Also what I said was that CRA loans defaulted at the same rate as similar non CRA loans. Nice try.

 

[trplnkl]

TRP,

Surprisingly we agree. It should have been about personal responsibility, but it was too easy. In the video I posted, BUSH, near the end of the video says "one more barrier to home ownership is bad credit, and we need to remove that barrier and allow people with bad credit to buy a home cause people with bad credit should have as nice a home as you do!"

When the president of the United States makes such a statement, people dont use personal responsibility in their thought process.

I too could have taken out a loan for a home here when they were built, as my wife pushed me to look at them. 4800 square feet, 879K and 5 bedrooms. She wanted a bigger home and with a ten year interest only loan, we could have afforded this home at 3679.00 a month. Her goal was to stay in the home for 5 years, flip, take the profit and buy a similiar home in another area with enough cash to put 50% down.

I knew things were not going to be rosy down the road and we did not buy the house. Today, that track of homes if 60% vacant! The prices are down to 485K and nobody wants them. Foreclosure signs are on every other garage.

It was all about mindset and personal responsibility. You are correct.

In addition, the next biggest factor to the housing collapse was the intense promotion of equity line loans. From 2003 through 2007, solicitations for these loans were in the mailbox everyday. Television was flooded with ads for equity lines. People foolishly took out these loans to buy extravagant things like motorhomes, motorcycles, cars, boats, jet skis and such.

Here, there are people who walked away from million dollar homes and are now living in their motorhomes. The local walmart supercenter allows these motorhomes to park there overnight and right around 10PM it looks like a trailer park.

In my parts, it was about greed and foolish thoughts. When the system made it too easy to buy, default and walk away, we were all doomed.

Thanks for the debate.

Peace.

I'm sorry, but I went back and watched two videos you posted here and didn't hear those words. I did hear to statements that could be a remix of those words but somehow lost the meaning of what he actually said. He did say that first time buyers with low income could have as nice a home as you do. I also hear his say that low income people that couldn't afford to make the payments should be able to use section 8 money for that. side note: has anyone else noted that the housing section 8 is named the same as a medical release from the military for mentally ill? Coinkydink? maybe, maybe not.

Anyway....IMO, it has been the government (both parties) with some of the entitlement projects over the years that has driven our society away from personal responsibility, common sense and down right logic. I also blame Nike...just do it, Burger King...have it your way and most of all the first fast food gunk creator...McDonald's for creating a "gotta have it all right now, instant gratification society.

 

[The Other Side]

Cmon trp,

dont take words out of context.

In this video at the 545 mark, BUSH outlines how freddie and fannie are taking steps (25 incentives) to help people with bad credit buy a home. BUSH then comments about it by making the statement that "they" could have a home just as nice as anyone else.

Keep it in context.
Burning Down The House: (Karl Rove - Bush Version) - YouTube#!

Peace.

 

[moreluck]

It's Barney Frank, not Barney Bush.

 

[trplnkl]

Cmon trp,

dont take words out of context.

In this video at the 545 mark, BUSH outlines how freddie and fannie are taking steps (25 incentives) to help people with bad credit buy a home. BUSH then comments about it by making the statement that "they" could have a home just as nice as anyone else.

Keep it in context.
Burning Down The House: (Karl Rove - Bush Version) - YouTube#!

Peace.

Actually, I'm not taking anything out of context, the person who edited the clip did that. Bush is talking about two different types of buyers.
Here is what he did say:

"Freddie Mac recently began 25 initiatives around the country to dismantle barriers and create greater opportunities for home ownership. ONE of the programs is designed to help deserving families who have bad credit histories [obvious edit] to qualify for home ownership loans. [noticeable edit] (at this point, don't just listen but watch the screen, you'll see it) If you put your mind to it, the first time home buyer, the low income home buyer can have just as nice a house as anybody else. [obvious edit]"

I realize this is kind of nit picking, but clips edited through out most often are hiding something or making things seem different than they really are. All the other versions I can find of this speech are either stop at an earlier spot than this one or are from an other speech where Bush covers just some of the same topics.
The idea that Bush was specifically seeking out people with BAD credit is just not true. He was looking for a way to help ALL people that previously couldn't get loans to buy a home and not all of them were deadbeats (as one of the obvious edits indicate). Some of them had medium incomes at the time, but not great credit histories. Some had no credit history, some weak credit and many with low income.
Now, did the deregulation go too far and allow for abuse of the intent, oh hell yea. IMO, the worst thing Bush did with this was not to put in safe stops to prevent those abuses as you outlined earlier. The government has a way of not doing enough and then turning around and doing too much.

 

[Jones]

But you guys ignore that the government is subsidizing the interest rates. If you take what would normally qualify to be a prime loan 20% downpayment, verifiable income, 740 credit score, verifiable home value, etc. you would have many more. You call a HUD loan a prime loan but it really isn't. Like I said you have to take an extremely narrow view to make your argument. Someone(those that pay taxes) are paying the higher interest rate as they default.

That's all very well, but what does that have to do with the working definition of a subprime loan? A subprime loan is a high interest loan to a borrower who does not qualify for the prime rate (hence the term "sub prime"). That's not a "narrow definition", it's the only definition. When anyone refers to subprime loans vis-a-vis the housing crisis, that's exactly what they are talking about.

12 U.S.C.A. ßß 2902(3) and 2903 - That's the third time I posted this for you. CRA subprime loans are what I am talking about. Also what I said was that CRA loans defaulted at the same rate as similar non CRA loans. Nice try.

Maybe you could post the specific language in the CRA that forced banks to make loans to high risk individuals? Because I can't seem to find it anywhere. And if CRA loans defaulted at the same rate as similar non CRA loans (which is what the data shows), then how are you reaching the conclusion that the CRA loans were higher risk?

 

[av8torntn]

That's all very well, but what does that have to do with the working definition of a subprime loan? A subprime loan is a high interest loan to a borrower who does not qualify for the prime rate (hence the term "sub prime"). That's not a "narrow definition", it's the only definition. When anyone refers to subprime loans vis-a-vis the housing crisis, that's exactly what they are talking about.

Why is a loan that is only viable due to government intervention or force not a subprime loan when that same loan under any other circumstance would not qualify for a prime rate?

Maybe you could post the specific language in the CRA that forced banks to make loans to high risk individuals? Because I can't seem to find it anywhere. And if CRA loans defaulted at the same rate as similar non CRA loans (which is what the data shows), then how are you reaching the conclusion that the CRA loans were higher risk?

Maybe you could post the specific language that shows the CRA is completely voluntary and unenforceable? Because I can't seem to find that anywhere. Maybe there is an April fools clause? Most of the statists cite the part of the enforcement provision that calls for no harm to the bank and ignore that the regulators get the power to determine what is harmful you have taken a different approach and seem to ignore the audit and enforcement provisions that I have cited. I have to be honest I just ground through many pages of regulations and cannot find any voluntary provisions.

Seriously I cannot find anything in that regulation that states it is voluntary after an hour on the federal registry.

I cited multiple times the parts that allow the regulators to audit to determine compliance. I also cited the part that demands compliance for any other regulatory approval. Anyway that I can view it that is the government using regulatory force to ensure compliance.

I have never been fixated on the CRA as a sole cause of the nations housing problems but I do believe that these market problems are primarily due to government intervention. I never even remotely claimed or suggested that the only government intervention was the CRA.

For the second part. I was the one who posted that CRA loans that were similar to "subprime" loans defaulted at the same rate. My suggestion was that the only reason the CRA provision loans were not deemed subprime was government involvement. It has been my suggestion that a loan that a bank would not normally make due to a higher risk is not a prime loan. I also suggest that you being fixated only on the interest rate doesn't really seem logical. For instance in your view every VA backed loan would be subprime only because they carry a higher interest rate. My feeling is that the regulators get to tag which loans are subprime and which ones are not and they are reluctant to tag loans they require or encourage as subprime. Given the losses at the government sponsored agencies of Fannie and Freddie should imply that many more of those loans were subprime than they had admitted. My suggestion was never that one loan was more or less risky than another given the same default rates and I'm not sure how you made that conclusion.

 

[av8torntn]

These private lenders were under no government pressure to offer subprimes yet they made them a core part of their business model because they were so profitable.

If they were so profitable why did they go under?

FYI - The CRA was passed in 1977 and that study was done in 1992 so even if it did show that redlining was non-existent that would be evidence that the CRA was working as intended, at least in the Boston area which was the only area that study looked at.

If it worked so well why was there a need to strengthen the regulations in 1995?

No that wasn't the paper. I think it was a 1994 or 1995 paper. I'll look for it if I get a chance but it is not central to my argument. It is interesting because they started the study to prove they needed to strengthen the regulations but came up some unexpected results. It was, I believe a national study. Your paper actually works for my view better. Your paper basically claims that from 77-92 all the government regulation didn't help anything and possibly made things worse. I didn't have time to look at the actual statistics to see what they really said just the summary but it would be interesting to see what method they used and what percent confidence interval they had. My position is steady and remains as one that government intervention normally has unintended consequences.

 

[Jones]

Why is a loan that is only viable due to government intervention or force not a subprime loan when that same loan under any other circumstance would not qualify for a prime rate?

Why is a dog not a cat, when they both have 4 legs? I'm sorry if you don't like the definition of a subprime loan, but it is what it is.

Maybe you could post the specific language that shows the CRA is completely voluntary and unenforceable? Because I can't seem to find that anywhere. Maybe there is an April fools clause? Most of the statists cite the part of the enforcement provision that calls for no harm to the bank and ignore that the regulators get the power to determine what is harmful you have taken a different approach and seem to ignore the audit and enforcement provisions that I have cited. I have to be honest I just ground through many pages of regulations and cannot find any voluntary provisions.

Seriously I cannot find anything in that regulation that states it is voluntary after an hour on the federal registry.

I cited multiple times the parts that allow the regulators to audit to determine compliance. I also cited the part that demands compliance for any other regulatory approval. Anyway that I can view it that is the government using regulatory force to ensure compliance.

No one is suggesting that compliance is voluntary, the question is where is the regulatory language that forces banks to make loans to high risk individuals. It's not surprising that you can't find it, because no one else can either.

I have never been fixated on the CRA as a sole cause of the nations housing problems but I do believe that these market problems are primarily due to government intervention. I never even remotely claimed or suggested that the only government intervention was the CRA.

For the second part. I was the one who posted that CRA loans that were similar to "subprime" loans defaulted at the same rate. My suggestion was that the only reason the CRA provision loans were not deemed subprime was government involvement. It has been my suggestion that a loan that a bank would not normally make due to a higher risk is not a prime loan. I also suggest that you being fixated only on the interest rate doesn't really seem logical. For instance in your view every VA backed loan would be subprime only because they carry a higher interest rate. My feeling is that the regulators get to tag which loans are subprime and which ones are not and they are reluctant to tag loans they require or encourage as subprime. Given the losses at the government sponsored agencies of Fannie and Freddie should imply that many more of those loans were subprime than they had admitted. My suggestion was never that one loan was more or less risky than another given the same default rates and I'm not sure how you made that conclusion.

The only reason that we're talking about the CRA is because you brought it up as an example of government intervention that led to the housing crisis, but so far I haven't any evidence that would support that conclusion whether it be regulatory language that forced banks to make bad loans or higher default rates on CRA vs non-CRA loans. I understand that you're not making the argument about default rates but given that and the lack of regulatory language I'm not sure how you're reaching that conclusion that the CRA was a contributing factor in the housing crisis.

 

[Jones]

If they were so profitable why did they go under?

Because the housing market stalled. That's not the only reason but it was the first link in the chain. Continuing to pump out new home loans at a high rate was lynchpin of their business model and once that slowed down everything else starting falling apart. Prior to that they were making insane amounts of money, during the peak years of the subprime market Angelo Mozilo's personal compensation was over 400 million.

If it worked so well why was there a need to strengthen the regulations in 1995?

No that wasn't the paper. I think it was a 1994 or 1995 paper. I'll look for it if I get a chance but it is not central to my argument. It is interesting because they started the study to prove they needed to strengthen the regulations but came up some unexpected results. It was, I believe a national study. Your paper actually works for my view better. Your paper basically claims that from 77-92 all the government regulation didn't help anything and possibly made things worse. I didn't have time to look at the actual statistics to see what they really said just the summary but it would be interesting to see what method they used and what percent confidence interval they had. My position is steady and remains as one that government intervention normally has unintended consequences.

It doesn't say anything like that. They didn't do year to year to comparisons nor did look at effects of government regulation, they analyzed the data in the 1990 HDMA report and reported the results. This was their conclusion:

A black or Hispanic applicant in the Boston area is roughly 60 percent
more likely to be denied a mortgage loan than a similarly situated white
applicant. This means that 17 percent of black or Hispanic applicants instead
of 11 percent would be denied loans, even if they had the same obligation
ratios, credit history, loan to value, and property characteristics as white
applicants. In short, the results indicate that a serious problem exists in
the market for mortgage loans, and lenders, community groups, and regulators
must work together to ensure that minorities are treated fairly.

If in fact they did strengthen the regulations in 1995 perhaps this is why. Let me know when you find that paper from 1994 or 1995, I'd like to see it.

 

[av8torntn]

Why is a dog not a cat, when they both have 4 legs?

Exactly. When is a subprime loan not a subprime loan? When the government says you have to close it.

 

[av8torntn]

Since you do not think the CRA is enforceable. This is the summary for the enforcement section.

The CRA requires that each insured depository institution's record in helping meet the credit needs of its entire community be evaluated periodically. That record is taken into account in considering an institution's application for deposit facilities, including mergers and acquisitions. (See CRA Ratings) CRA examinations (see Exam Schedules) are conducted by the federal agencies that are responsible for supervising depository institutions: the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Office of Thrift Supervision (OTS).



We will do this one step at a time since you want me to copy and paste from the act. Do you believe that Congress has given regulators the authority to interpret and implement this act or do you believe all interpretations and implementations are contained in the act itself?

 

[av8torntn]

Because the housing market stalled. That's not the only reason but it was the first link in the chain. Continuing to pump out new home loans at a high rate was lynchpin of their business model and once that slowed down everything else starting falling apart. Prior to that they were making insane amounts of money, during the peak years of the subprime market Angelo Mozilo's personal compensation was over 400 million.

I don't follow you here. On one hand you are claiming the banks made so much money to make loans they knew would default on the other hand you are saying that isn't the reason. Banks didn't really crank out that many subprime loans. There were some mortgage companies that did(countrywide) and some federal agencies that did(the list is much longer).

Again if they made so much money and the loans were so profitable how in the heck could those same loans drive them out of business. You cannot have it both ways here. Either they were not profitable and they drug the business under or they were profitable and the business mismanaged the profits.

I would also like to see your numbers to back up your claim that low income people defaulted at an equal or lower rate than middle income or upper income people. I would find that very interesting. I'm sure you can find a nongovernmental independent study to back that claim up. This is the basis of your argument now I will have to assume that you cannot back up your claim the CRA compliance was not voluntary.