Federal Reserve Governor Randall Kroszner said there is no evidence that programs boosting community lending spurred the mortgage crisis.

Delivering remarks on the topic of the Community Reinvestment Act (CRA) and the mortgage crisis, Kroszner said mortgages tied to the CRA represent a small part of the subprime market.

Kroszner noted that many of the foreclosures that are beginning to erode wealth in various communities are in middle or high income neighborhoods.



"We found that most foreclosure filings have taken place in middle- or higher-income neighborhoods; in fact, foreclosure filings have increased at a faster pace in middle- or higher-income areas than in lower-income areas that are the focus of the CRA," said Kroszner.

Kroszner made no comment on monetary policy in his speech

By Steve Stecyk and edited by Sarah Sussman
©CEP News Ltd. 2008