I get the impression this idea that affordable housing policies are the cause of the housing bubble is being promoted by conservative pundits, I keep hearing it from folks who only get their info from AM radio and Fox News. I will grant that it is partly to blame, but if you step back and look at everything that led up to the 2008 crash, affordable housing policies were among the smallest parts of it. From the Financial Crisis Inquiry Commission report: “the Community Reinvestment Act was not a significant factor in subprime lending or the crisis. Many subprime lenders were not subject to the CRA. Research indicates only 6% of high-cost loans – a proxy for subprime loans – had any connection to the law. Loans made by CRA-regulated lenders in the neighborhoods in which they were required to lend were half as likely to default as similar loans made in the same neighborhoods by independent mortgage originators not subject to the law.”
Banks want to make money (and that’s fine, we all do) but it’s not like the government twisted their arms to make millions of bad loans.
(I am only “for” the ACA in that it is better than nothing. You see how Washington works-- do you think those of us that want a European-style government run plan would ever get it? The GOP has gotten so partisan that a program virtually identical to a plan they floated in 1994 is now “communism”-- the ACA is a lot of things, but it’s not communist.)
