Tampa Bay: Lowest household income of most populous metropolitan area in the US (money, business)

[mrviking]

Originally Posted by vaughanwilliams

From what I've read, the CRA areas had less defaults than average. Blaming the CRA for the meltdown is just another Fox talking point.

Wow, a government agency saying it wasn't the governments fault. I'm sold

[vaughanwilliams]

Originally Posted by mrviking

Wow, a government agency saying it wasn't the governments fault. I'm sold

No, Marco Rubio, government did not cause the housing crisis - The Washington Post


Community Reinvestment Act had nothing to do with subprime crisis - BusinessWeek

Don't Blame the Community Reinvestment Act

Take it up with them. I doubt you're any more of an expert than I am.

[ApolloBeachRetiree]

Lots of good information in this thread. Here's some more:

The True Origins of This Financial Crisis | The American Spectator

PREVENTING A RECURRENCE of the financial crisis we face today does not require new regulation of the financial system. What is required instead is an appreciation of the fact--as much as lawmakers would like to avoid it--that U.S. housing policies are the root cause of the current financial crisis. Other players--greedy investment bankers; incompetent rating agencies; irresponsible housing speculators; shortsighted homeowners; and predatory mortgage brokers, lenders, and borrowers--all played a part, but they were only following the economic incentives that government policy laid out for them. If we are really serious about preventing a recurrence of this crisis, rather than increasing the power of the government over the economy, our first order of business should be to correct the destructive housing policies of the U.S. government.

[housingcrashsurvivor]

Originally Posted by vaughanwilliams

From what I've read, the CRA areas had less defaults than average. Blaming the CRA for the meltdown is just another Fox talking point.

Yeah, seems to be conservative silliness, at least according to substantial counter evidence presented by most scholarly papers I've read. You have to get away from the nonsense to make sense of it. It's hard for me to imagine people still don't understand this issue.

As to my posting a link to a paper from one of the reserve locations, the economists who work there tend to be quite smart. They're generally not the policy makers but the guys doing the actual work and their publications would be highly scrutinized in peer review--ie other economists, academics, etc., not just by lay people or political types or policy makers, so I tend to buy into some validity there. They'd be raked over the coals publicly if they were far off the mark.

I just did a quick google for something out of a university instead of the press and found this in about 3 seconds:

http://georgetownlawjournal.org/file...tW6k7YHuq8KGgw

see pages 1214-1220 which essentially states:

...Claims about the CRA’s role in the bubble have been thoroughly considered elsewhere and largely debunked...

...There is little evidence that the CRA contributed directly to the bubble....

...CRA-subject institutions made a disproportionately small share of subprimemortgage loans....

...Ultimately, though, blaming the housing bubble on the CRA suffers from two logical flaws. First, the residential-housing bubble was mirrored almost exactly by a commercial real-estate (CRE) bubble (see Figure 19). Although there is some interlinkage between residential and commercial real-estate prices, the CRE bubble cannot be attributed to the residential bubble....

...Second, the timing of the bubble vitiates the CRA explanation. The CRA greatly predates the bubble so it is difficult to attribute housing-price rises between 2004 and 2007 to a 1977 statute with a regulatory implementation that was last revised in 1995....

...Although one would expect some time lag before seeing the result of the CRA, the time lag is simply too long to make the connection plausible...

That paper published April 12, 2012 in peer reviewed

Georgetown Law Journal, Vol. 100, No. 4, pp. 1177-1258
University of Pennsylvania Institute for Law & Economics Research Paper No. 10-15
Georgetown Public Law Research Paper No. 10-60
Georgetown Law and Economics Research Paper No. 10-16

by

Adam J. Levitin


Georgetown University Law Center

&

Susan M. Wachter

University of Pennsylvania - Wharton School, Department of Real Estate

[DUNNDFRNT]

The crazy thing is after congressional hearings, award winning investigative reporting, there are still people blaming regulations from the late 70's. Is indicative of our current political climate where people believe what they want to believe and don't let facts get in the way of their chosen narrative.

[mrviking]

I am sure most would agree that by reducing loan standards for people who previously would not be getting loans. Then to become shocked that these loans became toxic. Might not of been the best thing for government to do. But I'm sure MSNBC and its talking points would still point fingers at the evil bankers.

[DUNNDFRNT]

Originally Posted by mrviking

I am sure most would agree that by reducing loan standards for people who previously would not be getting loans. Then to become shocked that these loans became toxic. Might not of been the best thing for government to do. But I'm sure MSNBC and its talking points would still point fingers at the evil bankers.

Let's say things happen in a bubble, and its as simple as that, people who couldn't afford loans selfishly got the loans anyway, that's step 1,the premise of a secure loan is just that, its secured by asset banks just had to sell the assets ans recoup the money, that was the risk they took when they made the loan, but again step 1, banks packaged the loans resold them to other investors, who then resold them again, each time taking a slice, all meanwhile the rating agencies where giving these assets a false rating, committing fraud your simple run of the mill fraud, so the guy that took that 100k loan he couldn't afford, after four or six iterations of financial institutions taking their piece and reselling them that piece of the financial instrument that contain the original loan was worth 600k, so not only where they bad loans to begin with they were super inflated by the ratings agencies. In short there was fault to go all around, but in terms of percentage of fault the financial agencies committed actual crimes as opposed to someone not paying a secured loan.

[mrviking]

Originally Posted by DUNNDFRNT

Let's say things happen in a bubble, and its as simple as that, people who couldn't afford loans selfishly got the loans anyway, that's step 1,the premise of a secure loan is just that, its secured by asset banks just had to sell the assets ans recoup the money, that was the risk they took when they made the loan, but again step 1, banks packaged the loans resold them to other investors, who then resold them again, each time taking a slice, all meanwhile the rating agencies where giving these assets a false rating, committing fraud your simple run of the mill fraud, so the guy that took that 100k loan he couldn't afford, after four or six iterations of financial institutions taking their piece and reselling them that piece of the financial instrument that contain the original loan was worth 600k, so not only where they bad loans to begin with they were super inflated by the ratings agencies. In short there was fault to go all around, but in terms of percentage of fault the financial agencies committed actual crimes as opposed to someone not paying a secured loan.

Once the government forces banks to make loans that before they never would of made, bad things are going to happen. Where in your world do you see its fair for banks to hold on to these toxic loans that they normally never would of made? They passed these on down the line so as to not get stuck holding these loans. Once this bell has been rung(thank you CRA), everyone involved will do what's in their best interest. Were laws broken? of course up and down the whole line. This is so typical when government sticks its nose into private business, this is what we call unintended consequences. Can you say "OBAMA CARE".

[vaughanwilliams]

Originally Posted by mrviking

Once the government forces banks to make loans that before they never would of made, bad things are going to happen. Where in your world do you see its fair for banks to hold on to these toxic loans that they normally never would of made? They passed these on down the line so as to not get stuck holding these loans. Once this bell has been rung(thank you CRA), everyone involved will do what's in their best interest. Were laws broken? of course up and down the whole line. This is so typical when government sticks its nose into private business, this is what we call unintended consequences. Can you say "OBAMA CARE".

"OBAMA CARE". Not sure what that has to do with Tampa's household income, but whatever.

[mrviking]

Originally Posted by vaughanwilliams

"OBAMA CARE". Not sure what that has to do with Tampa's household income, but whatever.

Just another example of the government sticking its nose in the private sector and making a mess. The government can't run any program with out throwing more and more money at it. Yet they want to tell the private sector how to do business and when things blow up point fingers at the business.