There's one big problem with all this, and that is the fact that CRA
does NOT cover private mortgage lenders, and far more of the
adjustable rate mortgages came out of these private lenders than CRA
covered banks.

"16. According to the 2006 HMDA data, 19 percent of the conventional
first lien mortgage loans originated by depository institutions were
higher-priced, compared to 23 percent by bank subsidiaries, 38 percent
by other bank affiliates, and more than 40 percent by independent
mortgage companies.

Robert B. Avery, Kenneth P. Brevoort, and Glenn B. Canner, “The 2006
HMDA Data,” Federal Reserve Bulletin, Volume 94 (2007), p. A89."

http://www.frbsf.org/news/speeches/2008/0331.html#16


Independent mortgage companies DO NOT fall under CRA, and bank
subsidiaries and affiliates largely fall under limited CRA
regulations.

This all comes down to one question: were banks forced to make bad
loans to satisfy CRA requirements, or did banks make bad loans to make
money. According to those numbers, CRA really had little impact on
"forcing" bad loans to bad debtors.

The CRA changes that Clinton made appear to have facilitated abuse by
allowing AR mortgages to be securitized, but it does not seem to have
forced banks to make bad loans to risky borrowers.