Frank Fesses Up: Gov't Shares Blame For Financial Crisis

27 Sep 2013 10:30 AM | Adrienne Randol

Frank Fesses Up: Gov't Shares Blame For Financial Crisis


....Though Frank blamed the government's affordable housing goals and homeownership campaign, he refused to implicate the Community Reinvestment Act in the mortgage crisis.

President Clinton tightened enforcement of the anti-redlining law in 1995, forcing banks to expand home loans in low-income urban neighborhoods in the years leading up to the crisis. Frank lobbied to expand it even further.

"I agree that the government (contributed to the crisis) undefined and it was Fannie and Freddie and it was the Clinton administration and the Bush administration and members of Congress on homeownership undefined but I think all of us agree that ... . the (CRA) was no problem."

Many economists, in fact, do not agree. A recent study by the National Economic Research Bureau found that the CRA led to "a clear pattern of increased defaults for loans" made by covered banks in the run-up to the crisis.

More, the 1990s law authorizing HUD to enforce affordable housing goals at Fannie and Freddie undefined a law that Frank backedundefinedmandates that Fannie and Freddie "assist insured depository institutions to meet their obligations under the Community Reinvestment Act."

Read More At Investor's Business Daily:
Follow us: @IBDinvestors on Twitter | InvestorsBusinessDaily on Facebook

© 2014 Colorado Association of Mortgage Professionals

Powered by Wild Apricot Membership Software