09-26-2008, 08:53 PM
CRA never urged any bank to make "no doc" loans. The banks made up "no doc" loans all by themselves. CRA did make it more profitable for banks to make loans in neighborhoods that they had previously redlined as marginal.
As far as "bad" no-doc loans being bundled with other loans and sold as a security, who's responsible for that little whoopsie? The underwriters—the commercial banks and the investment banks. Oh, dear.
As far as "bad" no-doc loans being bundled with other loans and sold as a security, who's responsible for that little whoopsie? The underwriters—the commercial banks and the investment banks. Oh, dear.