I thought this was interesting!

[sokinwet]

Not that 30 years working in the industry give me any special insights but rather than preach I'l state in laymans terms... CRA was designed to push lenders to provide services to the communities they serve. It is not and will never be popular with lenders because CRA requires them to be proactive in their communities and offer concessions that limit their profit. It does not require lenders to loosen credit standards or to make risky loans that they immediately sell on the secondary market for a quick profit. The current mess is the result of deregulation for the benefit of lenders and investors that allowed them to make a fast buck investing in mortgage based secutities ...not for the first time buyer that gets a 5% downpmt. loan.

[justplugit]

[QUOTE=sokinwet;622363] CRA was designed to push lenders to provide services to the communities they serve. It is not and will never be popular with lenders because CRA requires them to be proactive in their communities and offer concessions that limit their profit. QUOTE]

Would i be wrong in assuming this was meant for communities where people really couldn't afford a house and were really unable to pay back the principal?

Going back to the 1960's to qualify for a mortgage you needed a 20% down payment.
In addition, for a working family, the bank would only take the husband's salary in figuring the payments you could afford ,as it was assumed the wife would stop working at some point after having children.
That was sound principal.

When they started to allow both salaries for payments, people would buy a more expensive house leaving open default if one lost their job.

As always, it's pay me now or pay me later--time to pay the piper at the tax payers expense.