But the nice thing is that while the author clearly lays out the blame due to the Carter and Clinton administrations, as well as by ACORN and its activists, and especially Congress and the Community Reinvestment Act, he is also very clear and insightful about human nature. Rather than simply bitching about the government, he's willing to actually say that individual citizens should be responsible for their poor decisions and bad economic habits:
A no-down-payment policy reflects a belief that poor families should qualify for home ownership because they are poor, in contrast to the reality that some poor families are prepared to make the sacrifices necessary to own property, and some are not. Keeping their distance from those unable to save money is a crucial means by which upwardly mobile, self-sacrificing people establish and maintain the value of the homes they buy. If we empower those with bad habits, or those who have made bad decisions, to follow those with good habits to better neighborhoods—thanks to CRA's new emphasis on lending to low-income borrowers no matter where they buy their homes—those neighborhoods will not remain better for long.The reality of predatory lending practices seems to scream out at you, though, when you hear Bruce Marks talk about foreclosure rates due to low down payment loaning:
If we had a foreclosure rate of 1 percent, that would just prove we were skimming," he says. Accordingly, in mid-1999, 8.2 percent of the mortgages NACA had arranged with the Fleet Bank were delinquent, compared with the national average of 1.9 percent. "Considering our clientele," Marks asserts, "nine out of ten would have to be considered a success."10% foreclosure rate amongst risky subprime borrowers a success? Stupid. (and 'ouch') ((and 'oh, yeah. We're already there))
Simply put, the CRA is only effective in making things worse. Banks do NOT need regulations and involuntary compulsion to make loans that would be profitable. They'd do that anyways, because it's profitable. But the CRA does require that those banks also aggressively loan to those whose loan will be potentially (and now we see actually) very unprofitable. Banks shouldn't have to do that.
Bush called for a change to the Community Reinvestment Act TWENTY SEVEN times. But still, some serious blame is also due to the Republican Congress that could have fixed this when they had a chance. I just don't understand why they didn't.
I need more hindsight. I found a little bit from Stan Liebowitz HERE. I'm still looking for more. Please help.