C R A, what is it and why is it important ?

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C R A, what is it and why is it important ? - 3/16/2013 5:04:04 AM

MrRodgers

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.....it is the Community Reinvestment Act.

I have repeatedly seen this act blamed for the mortgage meltdown or at least a major contributer to it and thus for some...the major cause for the MBS (mortgage backed securities) meltdown. I want your take on this act and the role you think it played in the recent financial meltdown.

Why was it created ?

Is it the law of the land and if so, what does this law require ?

If there is a requirement and it was not followed, what is the enforcement mechanism ?

What are the specifics of this act ?

Did it and if so, why did it play any role during the recent mortgage meltdown ?

There is very little truth in the blogs and in volumes of commentary since about this act and and I'll explain later.

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RE: C R A, what is it and why is it important ? - 3/16/2013 6:00:35 AM

Yachtie

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CRA is a brick in the road of good intentions. It had consequences which in hindsight are, imo, quite evident. There were some who saw it in advance. They were deemed paranoid.

We've discussed the CRA in quite a few threads. Some see it as a good thing, others not. The CRA was instrumental in the mortgage meltdown. Not that it itself was, but that banks capitalized
on it and created a huge market (even exported overseas) with it; also see MERS. That market is in shambles. The failing mortgages could have been handled pursuant to law. Foreclosures and losses taken by those who made the bad bets, being both the homeowners and banks involved. But nooooo..... that's not how it has shaken out. The Law has been trampled in favor of the banks and the market they created. Profits to the banks, losses to the taxpayers. To big to fail so we are told.

< Message edited by Yachtie -- 3/16/2013 6:01:08 AM >

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RE: C R A, what is it and why is it important ? - 3/16/2013 6:36:20 AM

MrRodgers

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Yes, there has been several discussions about the CRA and most of it has been wrong like most of your response.

Less one of 25 (4%) CRA loans were involved in the meltdown. They were not of the highest rates and were in fact NOT required by law at all.

If any mortgage co. made ZERO CRA loans...nothing ever happened. No knowlegde or penalties from the feds. One friend's co. has made ZERO CRA loans and never once even heard from the feds.

It was mortgage fraud mostly by Countrywide, WAMU and others that were packaged with other very questionable mortgages, with insufficient due diligence, income or equity that were sold as the underlying value of the MBSecurities.

Regulators were at fault mostly by giving these securities a AAA rating which is the real govt. crime here.

< Message edited by MrRodgers -- 3/16/2013 6:39:33 AM >

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RE: C R A, what is it and why is it important ? - 3/16/2013 9:02:44 AM

JeffBC

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quote:

ORIGINAL: MrRodgers
Regulators were at fault mostly by giving these securities a AAA rating which is the real govt. crime here.

Heh... I could think of a few others. But yes, the idea that the banking collapse was the fault of any party other than the banking industry is simply not credible. The numbers don't work. Without those god-awful derivatives, pretend insurance on them, and pretend ratings on the whole package it never could have happened. That was the process by which molehills became mountains. It was also the process by which certain groups became fabulously wealthy. What a coincidence.

Worse, when you look at it all, there was no way anyone in the banking industry didn't understand EXACTLY what they were doing -- as did all of the regulators and prosecutors, etc. That means it was all a deliberate hoax to steal money -- and it worked -- and it continues to work under Obama's stewardship.

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RE: C R A, what is it and why is it important ? - 3/16/2013 9:48:19 AM

MrRodgers

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quote:

ORIGINAL: JeffBC

quote:

ORIGINAL: MrRodgers
Regulators were at fault mostly by giving these securities a AAA rating which is the real govt. crime here.

Heh... I could think of a few others. But yes, the idea that the banking collapse was the fault of any party other than the banking industry is simply not credible. The numbers don't work. Without those god-awful derivatives, pretend insurance on them, and pretend ratings on the whole package it never could have happened. That was the process by which molehills became mountains. It was also the process by which certain groups became fabulously wealthy. What a coincidence.

Worse, when you look at it all, there was no way anyone in the banking industry didn't understand EXACTLY what they were doing -- as did all of the regulators and prosecutors, etc. That means it was all a deliberate hoax to steal money -- and it worked -- and it continues to work under Obama's stewardship.

Oh yes. A friend for a long time, now ready to put maybe a couple hundred up on wall street went to a small equity bank. Most of their talk centered on how they (big banks) still are getting away with murder, operate with impunity and all seeking those easy Billions.

Even he now hates wall street and brought his money home.

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RE: C R A, what is it and why is it important ? - 3/16/2013 2:58:37 PM

Real0ne

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fr

this is very complicated subject and I could literally write a books worth of text just explaining it because it is huge, and deals with commercial, ucc and international law in addition to state laws.

basically securitization has no standing in law.

If I loan you money I have lost opportunity as a result of that loan because I have no way to get more to give more loans. If you did not pay me back I would legitimately be an "injured partyy"

Its not the case in banking.

The banks loan money with no personal injury to themselves if it is not paid back.

Only the injured party has a right to sue and there is no injured party since they are "investors" and that is part of the risk.

Either that or its favorites.

If you put your money up your investments can lose on the markets and you wind up with zero.

For them on the other hand, theirs do not, they do not lose a damn thing, hence the foundation for fraud and the scam as it is today.

I am sure that already has deer in the headlights look from most reading this.

Then further, the banks write loans and then securitize them.

Once securitzed they no longer have the capacity and standing to sue.

Yet they do. Major fraud!

They make copies of the notes, more major fraud and they get away with it.

When they do go to court lawyers have no interest in repairing it because there is like everything else so much money in not repairing it. cancer etc.

Then when you do get an honest judge like the one in arizona, who was the real target because he was going to make a major mortgage ruling aginst the banks, not that female senator, they are scared shitless for fear of their life and the general ignorance of the general brain cancer public.

So the judges are equally trapped to do anything about it.

that and what I just said aint even the zit on the gnats wing on the iceburg to even get a reasonable picture of the depth of the fraud and how this system operates.

The joke is however that a friend of mine went to a NACA attorney with a class action and that attorney said he did not have a case. Prosecuted pro se and kicked their ass.

that is what you are up against. the whole system is corrupt from the core and anyone "in the system" who does not play along gets very dead.

< Message edited by Real0ne -- 3/16/2013 3:02:07 PM >

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