The truth is out there.

McClatchy starts to unravel some of the foolishness from the finger pointing over the Financial Crisis

Here is the money quote:

In a speech last March, Janet Yellen, the president of the Federal Reserve Bank of San Francisco, debunked the notion that the push for affordable housing created today’s problems.

“Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans,” she said. “The CRA has increased the volume of responsible lending to low- and moderate-income households.”

In a book on the sub-prime lending collapse published in June 2007, the late Federal Reserve Governor Ed Gramlich wrote that only one-third of all CRA loans had interest rates high enough to be considered sub-prime and that to the pleasant surprise of commercial banks there were low default rates. Banks that participated in CRA lending had found, he wrote, “that this new lending is good business.”

Good luck hearing any of that on Talk Radio.

One comment

  1. Jonzee

    Exactly! Isn’t it ironic (snark) that JP Morgan Chase and Wells Fargo have two of the healtiest balance sheets and lower default mortgage problems AND have two of the highest CRA ratings in the nation. And on top of that underwrote Fannie and Freddie money like they had some sense?

    So, so tired of folks blaming minority homeowners for this bullshit!

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