Weekend reading...

There's been plenty of talk and writing on the causes of the financial mess we seem to be in right now nationally. Because I'm in the housing business I am often intrigued to read and follow up on such articles, blog posts, and other forms of media.

Today I found this article and it is a very telling and complete look at the origins of the problems we face today. It is a long article but one full of facts and figures. I hope you will give it a chance.

Enjoy your weekend.

Here is a snippet...

In 1995, the regulators created new rules that sought to establish objective criteria for determining whether a bank was meeting CRA standards. Examiners no longer had the discretion they once had. For banks, simply proving that they were looking for qualified buyers wasn’t enough. Banks now had to show that they had actually made a requisite number of loans to low- and moderate-income (LMI) borrowers. The new regulations also required the use of “innovative or flexible” lending practices to address credit needs of LMI borrowers and neighborhoods. Thus, a law that was originally intended to encourage banks to use safe and sound practices in lending now required them to be “innovative” and “flexible.” In other words, it called for the relaxation of lending standards, and it was the bank regulators who were expected to enforce these relaxed standards.