Community Lending Not Responsible for Mortgage Crisis

What a load. CRA started the ball rolling down that hill. Cra had noble aims but was expanded by the Clinton administration to force lenders into "underserved credit markets." It wasn't just the location of the property anymore.

The "mortgage crisis" we face in this country today has many contributing factors and I am certain as the crisis wears on and the fallout continues there will be many attempts to pin it on something or someone. In the end it will as it always does come down to several common and always present factors...greed and competition. It is fair to say that greed driven investors addicted to the high yield and ill conceived mortgage products of the 90's and those that pushed them share much of the blame. The old saying "a few bad apples don't spoil the whole bunch" won't apply once it is discovered that the level of malfeasance that lead to this crisis was wide spread among all of the contributing industries. Loan officers with no moral or ethical compass were the rule not the exception as evidenced by the significant reduction in the number of active loan officers in the industry today. Realtors not just a few bought into the fast and easy mortgage solutions selling many of their clients down the river for a quick closing. As a senior loan officer myself I was constantly selling against the Realtors desire to direct their clients to subprime lenders so they could close sooner without all of the perceived hassle associated with more suitable and stable finance options such as the FHA insured mortgage. Make no mistake about it; it was not just a few Realtors. The Loan Officers and Realtors I speak of created the next group of suspect actors the all important appraiser. Get it done or else was the normal basis of the relationship between the appraiser and many of the individual loan officers and realtors. Personally I hold the appraisers least responsible as it was not the appraiser that generated the pressure to meet unreasonable value requirements. In short, I for one am glad that the mortgage and real estate industry has come face to face with the bad practices of the past. I fully support many of the measures now being enacted or considered. I believe those responsible for indentifying the many causes of the crisis and pushing for change designed to address and eliminate said causes are on the right path. Interesting enough FHA and VA had it correct all along and for a very long time so did Fannie and Freddie that is until they (Fannie and Freddie) decided to get into the mud with the emerging subprime market. I guess it really does not matter in the end who we find to blame, with the exception of the most egregious violations no one will be punished that is none of the bad actors, the public on the other hand is always punished. Respectfully, John H. DeLeva "Doing Good Things for Good People" 14600 Detroit Road #1380 Lakewood, OH 44107 Phone: 216-228-5626 x15 Fax: 216-228-9186 Cell: 216-407-2155 Toll Free: 866-875-5276 Website: www.thedelevagroup.com

John, Great post! Those who would look to the affordable housing programs as the root of the current crisis are also the ones who swear that they never wrote a pic-a-pay, neg. am., or any of the other junk loan programs. There is blame to placed just about everywhere. But the truth of the matter is, dollar for dollar, home for home, the affordable housing programs represent only a small percentage of foreclosures when compared to the rest of the garbage that was written out there. I keep a close watch on the foreclosures in my area and sure, there a handful of FC's in the lower income neighborhoods. But that number is dwarfed by the number of homes in middle and upper income level neighborhoods. And when I say upper income, I'm talking about ocean front homes in the $2m - $3m range. One is going on the block tomorrow as a matter of fact.

What a bunch of BS. This article is the beginning of Rewriting History. Sen Frank and Dodd should be fired for their involvement in the mortgage meltdown.