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Most Subprime Lenders Weren’t Covered by CRA
Posted By Barry Ritholtz On June 27, 2009 @ 9:00 am In Bailouts,Credit,Legal,Real Estate,Really, really bad calls,Regulation | Comments Disabled
The CRA brouhaha last year led the Orange County Register to run an analysis of “more than 12 million subprime mortgages worth nearly $2 trillion” in late 2008.
What did their data based analysis discover?
“Most of the lenders who made risky subprime loans were exempt from the Community Reinvestment Act. And many of the lenders covered by the law that did make subprime loans came late to that market – after smaller, unregulated players showed there was money to be made.”
Among their research conclusions:
These are facts, adduced from analyzing data.
Data based analysis, for those of you who may be unfamiliar with the term, is how research and discovery get accomplished in the real world. It is an alternative way of arguing that the “Blame CRA” proponents are blessedly unaware of. However, outside the universe of rabid partisan sniping, its how actual analysis gets accomplished.
click for larger graphic
Chart courtesy of OC Register 
Most subprime lenders weren’t subject to federal lending law 
THE ORANGE COUNTY REGISTER, Sunday, November 16, 2008
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2009/06/most-subprime-lenders-werent-covered-by-cra/
URLs in this post:
 Image: http://www.ritholtz.com/blog/wp-content/uploads/2009/06/cra-chartg1109.gif
 OC Register: http://www.ocregister.com/newsimages/Graphics/2008/11/hdmachartg1109.gif
 Most subprime lenders weren’t subject to federal lending law: http://www.ocregister.com/articles/loans-subprime-banks-2228728-law-lenders
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