Commentary On “Holman Jenkins: Washington’s Suicide Mission”
Gosh, I real estately hate to agree with the very bitter and misguided Marcia Crowley, but the CRA was not the cause. The blind and crazy squirrel actually found a nut! I think a far more significant factor was the change in tax law back in the late 90′s which allowed us to waive gains on real estate speculation if held at least two years. Weren’t a lot of these loans two year no prinicipal? Tax laws have a powerful effect by handing out tax free gains.
As far as the CRA being the cause, most of these subprime loans gone bad were for McMansions in the boondocks, not low income housing in CRA controlled areas. There is plenty of blame to go around. The originator of the loan, the real estate speculator, the people who rated them, the people who bought them, and the people who elected the idiots who set up the tax and fiscal policies are all to blame.
The CRA is a red herring.
