Ellen Schloemer, executive vice president of the Center for
Responsible
Lending Self-Help Credit Union in North Carolina, disputed two reasons
many people are blaming for the subprime mortgage mess.
One is the Community Reinvestment Act, a 1977 law that encourages
borrower
activity in low- and moderate-income neighborhoods.
"How people can think that a law that's been on the books for 30
years
somehow precipitated or caused the subprime crisis is frankly just
beyond
me," she said. "I think it is a smokescreen. CRA did not apply to most
subprime lenders."
Also being scapegoated, she said, are Fannie Mae and Freddie Mac.
Although
the two institutions did buy too many risky home loans, their volume
was
dwarfed by those in the private market, she said. "I think it's
political
nonsense to blame things not at fault."
Responsible
Lending Self-Help Credit Union in North Carolina, disputed two reasons
many people are blaming for the subprime mortgage mess.
One is the Community Reinvestment Act, a 1977 law that encourages
borrower
activity in low- and moderate-income neighborhoods.
"How people can think that a law that's been on the books for 30
years
somehow precipitated or caused the subprime crisis is frankly just
beyond
me," she said. "I think it is a smokescreen. CRA did not apply to most
subprime lenders."
Also being scapegoated, she said, are Fannie Mae and Freddie Mac.
Although
the two institutions did buy too many risky home loans, their volume
was
dwarfed by those in the private market, she said. "I think it's
political
nonsense to blame things not at fault."
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