On the recordApril 28, 2010
And you've got a home mortgage, a home mortgage that is subsidized by the taxpayers. Because, remember, this was a part of the problem with the amendments to the Community Reinvestment Act in the 1990s, and it was this: An individual could have no income, no assets, no job. With all of that, you could still get a mortgage just based on your welfare benefits. This was a complete change in the way mortgages were given out. And welfare is inherently unstable. So to think that a 30-year mortgage is being given to someone on the basis of their welfare payments. We had never done that before in the United States. And so what we saw is a correlation with a very high rate of foreclosure. What inducement or incentive is there for an individual to save up to buy a house, save up for a down payment, be frugal, do what you need to do to have a good credit score to get into a house when if in fact because of the Community Reinvestment Act, banks were forced to not look at credit scores essentially and to give mortgages to people on the basis of their welfare checks? And a lot of these mortgages that were given would give cash back to people. Then people went out and took home equity loans against their home and they had virtually nothing in the home. No wonder we're in the problem we're in. If you change your banking standards to ones that don't even rank up with a comic strip level of regulations, you're going to get disastrous results.
