AdamT
DP Veteran
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- Jul 26, 2011
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You do understand that the widespread use of credit default swaps gained widespread use because of its use in the home market?
You do understand that the easing of rules was part of a compromise package to pass new rules for CRA in 97?
You do understand saying zero means it had NO impact. We know that isnt true or it wouldnt have been calls to reform it as the first act of the 2008 housing and finance committees.
Current figures are that some $1trillion in paper guaranteed by GSEs has foreclosed. No impact eh?
You do understand that only a tiny percentage of the bad subprime loans were subject to the CRA, right? You do realize that that tiny percentage was of much higher quality than the non-CRA loans? The CRA loans defaulted at about a 50% lower rate than the non CRA loans, yes? And you understand that it the loans hadn't been obtained from CRA lenders that there was absolutely nothing preventing the borrowers from obtaining loans from non-CRA lenders? And the non-CRA loans were more expensive and had worse terms than the CRA loans? So that, if there had been no CRA, there would have been more defaults?
Not sure why you find this so hard to grasp.