Why CRA loans weren’t toxic subprime loans
Mike at Rortybomb wades into the CRA debate with a very good point: toxic subprime loans bear almost no relation to CRA loans.
80% of the subprime mortgages expired in 30 months; they perpetually had to be refinanced. 75%+ of subprime mortages had a prepayment penalty. This is not at all what CRA loans looked like. CRA rooted for solid, longer-term mortgages.
I do hope the formal debate between John Carney and Barry Ritholtz happens; I’ve already lined up John Gapper and Mike Mandel as judges (they say they have no opinion on the matter), and I’m pretty sure I can host it in a Reuters TV studio. Come on, Barry, you know you want to!