Links
Loans to minorities down 62%
A study to be released this week and a bipartisan commission have conclude that the Community Reinvestment Act (CRA), which conservative Republicans and commentators have frequently blamed for bursting the housing bubble, had little impact on the crisis. Yet mortgage lending to African-Americans and Hispanics plunged precipitously - by more than 60 percent between 2004 and 2009 - according to a new study of loan information that banks submit to the federal government.
Critics charged that the CRA forced banks to approve mortgages for poor, unqualified buyers who could not maintain payments and went into default or foreclosure, causing the housing market to collapse. That charge was also leveled often at the affordable-housing goals of Fannie Mae and Freddie Mac, federally sponsored enterprises that buy mortgages made by private lenders.
But the Financial Crisis Inquiry Commission established by Congress concluded in January that the 1977 law designed to prevent redlining was "not a significant factor in subprime lending or the crisis." Ben Bernanke, chairman of the Federal Reserve, had made a similar statement two years ago, but the criticism continued.
The bipartisan commission also found that the affordable housing goals "contributed marginally" to purchase of risky mortgages by Fannie and Freddie.
and here