djAdvocate
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only posting when the mood strikes me.
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Post by djAdvocate on Feb 11, 2012 0:58:17 GMT -5
i know about that. they wrote themselves around that law. what they did was perfectly legal because of it. is that what everyone means?
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EVT1
Junior Associate
Joined: Dec 30, 2010 16:22:42 GMT -5
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Post by EVT1 on Feb 11, 2012 1:33:57 GMT -5
Of course the large banks have found many ways to use their influence as well. I read a quote from someone the other day that said. "Give a man a gun and he can rob a bank but give a man a bank and he can rob the whole world" Awesome!
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workpublic
Junior Associate
Catch and release please
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Post by workpublic on Feb 11, 2012 9:59:50 GMT -5
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djAdvocate
Member Emeritus
only posting when the mood strikes me.
Joined: Jun 21, 2011 12:33:54 GMT -5
Posts: 75,233
Mini-Profile Background: {"image":"","color":"000307"}
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Post by djAdvocate on Feb 11, 2012 10:50:01 GMT -5
i haven't the foggiest. it was a great tragedy, for sure.
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phil5185
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Post by phil5185 on Feb 11, 2012 17:23:02 GMT -5
The fact is they chose to just make crumby loans and they knew (or should have known) those loans would blow up. As I recall, it was a bit stronger than "if you choose". Obviously the CRA doesn't say "you shall make bad loans", even Jimmy Carter knew better than that. If you look a the loans that the CRA dictated, ie the FHA 235 and the FHA245, you'll see where the lender was compensated for taking the required risk based on the community demographics - the consequence of not taking the risk was that you were disallowed from writing prime loans in that entire business area. I haven't read them (and don't intend to) but the jist of the 235/245 mortgages in the 1970's was 'reverse amortization'. You make ~3% down payment, you pay less than IO at first, the loan steps up each yr until you cross the IO point at about 4 - 5 yrs, then at 7 yrs you reach the amortization point and pay a steady rate for 23 yrs. The rates were abut 10% (in an 8.5% to 8.75% market).
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