Getting to the truth of financial crisis

Over the last few weeks, I have read some Fence Post rants that I thought were really offensive.

They were trying to scapegoat this entire economic mess on Americans who live in low-income neighborhoods.

Only one of those writers could remember the proper acronym and year of the bill: The Community Reinvestment Act of 1977 or CRA.

According to Business Week and Barron's, hardly bastions of liberalism, the CRA required banks to lend to people in the low-income neighborhoods they took deposits from.

Until the CRA's enforcement was weakened by this Bush administration, those loans were given with a higher degree of supervision than other loans.

The repayment of those loans was actually more reliable than most other loans because of the strict regulations that were required.

Most of the subprime loans that were made in this crisis, over 80 percent, were made by firms that were not subject to the CRA.

Most of the problem can be attributed to banks and mortgage companies making as many loans as possible and being allowed to sell those loans off in bundles to other firms, which sold them to other firms and so on.

These companies were engaging in irresponsible speculation and failed to keep adequate capital in case, well, those speculations were wrong.

Essentially, they were flipping mortgage loans, and many of those loans were made to people flipping houses trying to make a quick buck.

I don't blame those Fence Post writers totally. I have heard the same rant almost verbatim from Rush Limbaugh.

I suggest that before they start blaming other Americans for anything, they should look into the subject more.

That might require a little effort and maybe even some reading on their part. However, don't you think getting to the truth is worth the effort?

John W. Simmons

Arlington Heights