Community Lenders

Is it really the fault of the lenders?

“Redlining”, in which mortgage lenders would refuse to grant home loans to low-income areas used to be common practice in the industry, because it avoided risk. With the Community Reinvestment Act (CRA), which was passed in 1977and revised under the Clinton and Bush administrations, reversed this trend. Lending institutions were coerced by the government to begin a practice known as “Reverse Redlining”, in which people who cannot afford houses are given loans for those houses anyway. Before we start blaming the lenders, why don’t we repeal the CRA?

That’s true. The government shouldn’t have encouraged such risky loans. The country would be better off today. Mainly, I guess it doesn’t matter at this point who is to blame. The problem needs to be addressed and quickly.

Even with all of the money that the government is going to throw on top of this fire, we have yet to see if it will be a fix or just a band-aid. I think the problem is far too complex to guess at the outcome. We will just have to wait and see what happens next.

Eddy Fernandez president of All In One Mortgage Lenders give back to the community