Yep, this is exactly the problem - CRA does not equal subprime.
I love how the financial incentive (make a loan, take commission, sell to investor) is dismissed out of hand in favour of some mushy "affordable housing" ethic. Like the banks were really operating that way in the 90's, they didn't care about the money, they just got caught up in all that liberal propaganda. Haha.
For all practical purposes it does. CRA was a bludgeon over the heads of banks to lower lending standards. Others not covered by CRA, Countrywide being the biggest, were pressured and declared they would follow CRA guidelines. And who bought the lion's share of the subprime/junk loans right off the bat? Fannie & Freddie, who made it their objective to make 50% or more of their business (as pointed out in links & quotes above).
Fannie, Freddie, and political pressure on AIG to insure the junk/subprime loans were critical for the whole "affordable housing" initiative. Until F&F started to buy them up, there was no "market" for subprime loans ("We'll buy your sh!t loans!"). Until AIG was pressured into insuring the turds, there was no way to mix them in with other good loans.
Like HTG wrote, CRA was the necessary but insufficient beginning of gov't distortion of the housing market and as such gets most the heat.
Up until CRA, F&F's sucking up the bad paper, etc. lending standards had been static for decades and home ownership rates had been steady as well. It took gov't pressure to increase home ownership rates and the only way to increase it was to make riskier and riskier loans, as the good risks already had theirs.
We've been providing you with data and explanation all throughout this thread. You've consistently ignored it in favor of your skewed world view.
Pretty much. Not only that, what occurred was predicted
back in 1999 when folks saw the pieces fall into place. It was just a matter of time.