Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

The Great Recession Was Caused by Greed

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

The Great Recession Was Caused by Greed

Article excerpt

In his April 1 letter "Democrats' Policies Led to U.S. Economic Problems," Dave Majernik (vice chairman of the Republican Committee of Allegheny County) blamed Bill Clinton, congressional Democrats and the Community Reinvestment Act for the mortgage crisis. He stated that the legislation "forced bankers to give mortgage loans against their better judgment to high-risk borrowers who couldn't afford to repay them." This is pure hogwash.

The CRA prohibited mortgage companies from the practice of "redlining" - denying entire neighborhoods from getting mortgages, forcing lenders to individually vet mortgage applicants.

This could be a tedious process and the lenders really did not need to worry about loan repayment as long as the applicant could afford the upfront commission. …

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