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Did redlining accusations lead to the subprime mortgage mess?

By Walter Olson, Ted Frank, and David Nieporent

Stan Liebowitz writes in the New York Post:

Perhaps the greatest scandal of the mortgage crisis is that it is a direct result of an intentional loosening of underwriting standards - done in the name of ending discrimination, despite warnings that it could lead to wide-scale defaults. ...

In an earlier newspaper story extolling the virtues of relaxed underwriting standards, Countrywide's chief executive bragged that, to approve minority applications that would otherwise be rejected "lenders have had to stretch the rules a bit." He's not bragging now.

I'm not sure I entirely agree, but it's an element we should be considering as we look at the new complaints of "racial discrimination" through excessive sub-prime loans.

Full post as published by Overlawyered on February 09, 2008 (boomark / email).