Consumer Law

CRA and Affordable Housing Goals Didn't Cause Crisis

By Alan White

I wrote about this some time ago here.  Fed economists Robert Avery & Kenneth Brevort have a new paper out using a sophisticated empirical analysis to compare very similar mortgages that did or did not qualify for Community Reinvestment Act or GSE affordable housing goals credit.   Consistent with prior studies, they find that CRA/GSE loans performed better, i.e. were less likely to contribute to the foreclosure crisis, than similar non-CRA/GSE loans.

The ideological battle over the story of the crisis, and the relative roles of regulation and deregulation, is fought as much with slogans and beliefs as with facts, but for those who think facts matter, this study is worth reading.

Full post as published by CL&P Blog on January 05, 2011 (boomark / email).