I understand completely what the CRA regulations were for. It was to fight redlining and redlining is basically proving someone can pay back aa loan. Its what they did to me when I bought my last home. You know, check my credit, insist on 20% down, make sure Im employed.
If this is complete understanding, the moon really is made of green cheese. Redlining is the practice of denying credit to a group of people based on street addess. Traditional lenders simply would not take or consider an application from anyone in neighborhoods they had drawn red lines around on a local map. Bill Gates could have lived there and no one would have taken his credit application. These LMI (low- and moderate-income) neighborhoods were simply consigned to the rapacious finance companies for all their credit needs. That's what redlining was.
What you are talking about is called underwriting. The due diligence and sound business practice of checking the financial situiation and capacity of a credit applicant. This is what lenders would NOT do for applicants living in redlined neighborhoods. Those folks just got a big fat NO right off the bat regardless.
You appear of course to be somewhat confused as to what relevant loan standards actually are. You think "employed" should be a criterion simply because you are. Why wouldn't assets be as important as income? If I have $100K in your bank, do I become a risky borrower of $50K from your bank? What do you do about people with lumpy incomes, like real estate agents and seasonal workers? And a 20% down payment is a relic from an ancient and bygone era. It simply throws young people out of the homebuying market even though they could quite easily afford to make the monthly payments. That's as discriminatory as redlining was.
Its about liberalism and your twisted world beliefs because you fail to look sny further back than 2002 and insist its Bushs fault when in fact Bush warned the Congress in 2000 and tried to regulate the GSEs in 2005 to no avail.
There was no path to a credit criss until the failure of Bush's tax cuts for the rich prompted the Fed to rush in as backstop and freeze interest rates at 1%, thereby causing institutional investors to go on a hunt for yield. That was the trigger, It happened in 2002.
Bush's only plan for the GSE's was to shut them down and "privatize the mission" by turning the whole ball of wax over to Wall Street. Same thing he wanted to do with Social Security. It was all a scam. Real estate and financial markets were meanhwile growing and changing. The GSE's were getting bigger because the country, the economy, and the residential real estate market were getting bigger. Everyone recognized a need for GSE reform to establish safety-and-soundness controls and limits in this expanding world. Bush didn't care about any of that at all. He just wanted to chop the GSE's up and hand all the pieces over to Wall Street. That was the extent of his program. There was nothing more to it than that.
Your reference to 2005 is of course to the failed S.190 bill that proposed draconian caps on the volumes that the GSE's could hold at any given time in their own portfolios. Those caps would have forced the GSE's out of market share and out of emerging product lines. Guess where that business would have gone. S.190 was just another attempt at giving free gifts for Wall Street. And of course as the right-wing propagandists never tell you, the bill ultimately failed because even Republicans wouldn't vote for it. A bill was needed, but that wasn't it. Meanwhile on the House side, Michael Oxley had passed a safety-and-soundness related companion bill. The Bush administration torpedoed it because it didn't do enough to put the GSE's out of business. They had done the same thing in 2003.
Hell even the NYT in 1999 warned of the ever increasing size of the GSEs.
Reactionary fear of big numbers. As noted, the GSE's were growing because the nation, the economy, and the residential real estate market were growing. A smarter President would have spent less time worrying about the GSE's and more time guarding against the excesses of Wall Street rather than aiding and abetting them. But we didn't get much of a smart guy out of that mess of 2000.
Being stupid is one thing, but being selectively ignorant to defend a corrupt position is much worse and you and Cardinal do that on a daily basis. Then again maybe you two just dont possess the cognitive abilities to understand the SubPrime issue in totality. Thats not my problem, and no amount of your isolated diversions are going to wipe the slate clean of all of the damage the democrats under Clinton did to our long term economy.
LOL! People who don't even know what the words mean still pretend to know what they are talking about. Pump out nothing but the standard, long-ago debunked right-wing swill, and you can only expect to be slapped down for it. Low-grade is low-grade, after all.