patrick.net

tatupu70 says

iggyman says

Banks and mortgage lenders made bad loans because there was very little incentive for them not to and very big incentives for them to do so. They ‘passed the buck’ to FANNIE and FREDDIE and the secondary market and collected their money up front. They didn’t really care if the loans got paid back because they no longer owned them

I agree with that to a point, but if that were the case then why did we have to bailout Wells Fargo, BofA, Citi, etc. along with Countrywide, National City, etc. It’s not as if the bankers and mortgage brokers were any smarter…. They owned and continue to own a LOT of them.

They got caught up in their own game. They aren't any smarter than the rest of us. But when lending was lending - they earned their money from collecting interest on money they lent out rather then selling the loans - their incentives didn't conflict. It was "make good loans or go broke. With securitzation it became 'make all the loans you can find an excuse for and pocket the cash - or some other lender will. And I don't want to explain to the board of directors why the competition is blowing us out of the water.'

Bap33 says

Well .. lets try this another way to avoid traveling the same path redundantly. I will try to list the facts of the bubble the we all might agree on. Then add what you see I missed that is shared fact and point out any fact I list that you disagree with .. just to give us a point of referencs. Lets just try this way, please.

1) The lending standards were reduced from 20% down, to NINJA loans all around between 1995ish and 2005ish. Would you agree? If not, please pin-point the time frame for the reduction in lending standards and why.
2) Before the lending standards were reduced there were fewer possible buyers in the housing pool. Would you agree? If you disagree please share why the buyer pool increased.
3) The increase in pretend “entry level” buyers thanks to the new lower standards created higher demand and accelerated building/flipping/speculation. Would you agree? If you disagree, please explain where the increase in demand came from.
4) A push upwards in all markets due to the upwards push from the bottom was the next step in the bubble. Would you agree? If you feel the bubble was not expanded bottom-first, please give some detail.
Those are just 4 steps of the bubble reduced to very common terms in an effort to find where we do agree. I am not trying to load up on you or put words in your mouth. Would you please share your position on these 4 areas and add any detail that you feel would express your view better. Thank you.

If anyone is interested, I've laid out the major changes in lending guidelines and loan products since 1998 at http://valusage.com/housing-crisis-causes that led to values increasing so much in relation to incomes. (It's a new site - still working out the bugs). I purposefully stayed away from getting into why those changes were made - that leads to too many drawn out debates like this one!

Bap33 says

but only tax payers get to be loosers in Barryville

You do realize that TARP was enacted before Obama, right?

@iggy,
great grouping of info. You avoided the blame game very well and just left info. Can't argue with info. Good job.

@tatupu,
Sure, I knew that. I'm pretty sure you know what I was getting at with my post, and for the record, Bush was a spend-a-holic. TARP, schmarp, it's all poop. lol

You know, one area we skipped in placing blame was the need of a buyer demografic that would not be able to place a proper value on homes and dollars ... while buying the stucco-wrapped crap that was pumped into the "entry level" market of 2002-2006. Did you ever catch the loacal paper's putting out their cheerleader crap about how the minorities were doing so well by tracking "sir names of owners'? What a crock. Do they track sir (or is it sur?) names of forclosed loan-liars now? THat would be good info. Do you feel a buyer demografic that lacked some home value/dollar value ability was part of the needed mix? Or do you think they were all greed driven? Or what? Thanks.

The data is clear. Government initiatives in 1994 which included revisions to the CRA and HUD's directing Fannie/Freddie to allocate massive sums of money to subprime loans distorted Homeownership in the US. In a matter of months Homeownership exceeded the historical record high and continued to rise rapidly. Rising homeownership caused prices to begin to rise unsustainably in 1997.

@tatupu,
do you agree with the data in the graph?

whitneyross says

The data is clear. Government initiatives in 1994 which included revisions to the CRA and HUD’s directing Fannie/Freddie to allocate massive sums of money to subprime loans distorted Homeownership in the US. In a matter of months Homeownership exceeded the historical record high and continued to rise rapidly. Rising homeownership caused prices to begin to rise unsustainably in 1997.

Yes, the data is probably right. Home ownership definitely increased. The logic is flawed though. I'll give you an example to try to illustrate it for you and whitney.

I went to the local Qick-E-Mart to buy a soda because it was hot and I was thirsty. While I was there I decided to try a diet mountain dew. Never had one before. While I was walking up to the counter to buy it, a guy bought a scratch off ticket and won $100K. Hooray!

So, now when I tell the story he won because I was there buying a diet mountain dew. The data is clear. Noone had won the lottery in that store until I picked out the Dt. Mountain Dew. And as soon as I picked it out somone won! Eureka! It quenched my thirst too--it's a miracle drink.

Put simply, just because B follows A doesn't mean A caused B.

Hope that helps.

@austin

We all know how that went. It’s hard to feel much compassion for those buyers today, even though the media paints them as hapless victims of a rope-a-dope scheme. Everyone, including the banks, got swept up in groupthink and didn’t want to feel left out of the buzz. What’s weird is that I’m seeing almost the same buzz and groupthink going on again, including with friends of mine and even in some of the posts here.

Which is exactly why Obama needs to let the markets reset themselves. We cannot continue financing GDP with equity and with 3 million more jobs due to be offshored our middle class will not be able to afford these home prices that are being inflated by the agents and their "Multiple Offer" schemes. Obama needs to act quickly as he said he would, so far he is allowing the banks, congress and the poor buyers of yesterday dictate his course....I am not with that kind of hopeless change.

Where is the hope? The HOPE that the markets will reset? The HOPE that huge tax incentives will be provided to keep jobs local?

@misstrial

I remember being shunned by the neighbors because I was a renter (God forbid!) even though I was younger, better educated and a highly trained professional - made NO difference to these people. Their WHOLE IDENTITY was in being a known as homeowner: having people wave as they washed their cars in the driveway and honk out in the supermarket parking lot, local fame….the whole deal :/

I get the same in Sierra Madre, but when I look back I have smirk on my face because I know I am looking at the idiot that bought at the peak for 899K whereby I will get something for 450K.....should I decide to go that high.

Today, a house is like a BMW...but tomorrow it will be like an old beat up BMW, no one will want it.

Those dang WW2 Veterans and their Socialist Home Ownership Programs!

That's about the same time they started fluoridation of the water supply! I smell a commie plot.

4x said:
Shame on you for showing no remorse for any 6th generation children of slaves, they need our empathy and good will. Imagine if someone had of kicked you until you were down for 400 years and then all of sudden released your shackles, sent you on your way with no education or understanding of how society works.

Um... American Revolution... ever hear of it?

I dunno, I may be wrong but it sounds like you know what is better than African American's what is best for them.

@mike3

Right, here is the solution to African Americans problem.

A small percentage of African Americans (1/3 of the population) need to be forced to attend college enrollment and the remaining portion need to be dropped from welfare altogether. While the majority (2/3 of the population) are on the right track, building their families. About 1/3 of the population has not seperated itself from the enslaved thoughts and impoverished mentalities that came from slavery. IE Lil Wayne, Lil Kim, Biggie Smalls, Tupac. On the opposite end of the sprectrum you have Barrack Obama, Oprah Winfrey, Don Cheadle, Denzel Washington, Bill Cosby, Maya Angelou, so forth and so on...these are people that represent the real black community. The others are just a part of the poor communities that plague America. Poor people across the world are all the same...stupid and over indulgent on immoral behaviors. Just take a look at those poor Indian children in that movie Slumdog Millionaire. They are about to lose their million dollar contract because their parents wont send them to school...that is sad.

Look up Clarence 13X then you will understand why my name is 4X.

Here is another solid debunk of the old "CRA caused the housing crash" baloney:

http://krugman.blogs.nytimes.com/2009/11/02/cre-and-the-cra/

Also you can follow several links to read more.

Elvis cannot be bothered with facts nor with solid evidence. So what. No big whoop.

@ justme .... for old times sake .... if CRA did anything, good or bad, bubble or no, what did it do after the changes Komrade Klinton made? What action or activity would you point to and say "this right here was due to the CRA using the new Klinton guidelines and supporting legal structure". Anything justme, please. Thanks.

@ bap33, sorry, I don't understand the question.

I suggest reading the Krugman article. It contains the perfect evidence that CRA was a NO-OP (as they say in computing).

@Elvis

I dunno, I may be wrong too, but it seems like the Government claims to know better than Americans what is best for us. The problem is that virtually everything the government touches turns to crap (the law of unintended consequences). Could it be the reason that our country is losing its prosperity, its jobs, its currency is the politicians (both parties) are completely out of touch and make decisions that cause more damage than help?

I read a quote from Newsweek that would help bring light to your statement. It read:

"If the American people want the president to be more like the Barack Obama they elected, perhaps they should start acting more like the voters who elected him."

The challenge for any president is that if they did what needs to be done (Raise Taxes, Cut Government Programs, Regulate the Banks, etc.) to bring our country back to prosperity they would not get a second term, their party would be typecast forever as the party who does nothing for the people....and the opposing party would be seen as more favorable for the long term. Voters are a fickle group, Americans even more so...we really dont want change because the first instance someone speaks of cutting programs, raising taxes or pulling out of Iraq the other side starts to bark in outrage and we change sides.

==========================

I was talking this over with Vincente and Headset in another forum.

Headset Says:

Has any politician ever won with the “cut” platform. All I hear about is what goodies politicos will provide for whoever votes for them. I hope you have an example of an elected official who actually won with a campaign platform of across the board spending cuts, delivered on those cuts, and was then re-elected. It would provide hope.

Vincente Says:

Many voters want a free lunch. They want services without taxes. Thus no politician of the 2 major parties actually has any intention of really cutting overall expenditures drastically. They make symbolic cuts in places that viscerally please their constituents, and then layer on the pork somewhere else.
It’s high time for a 3rd party.

The reason I quote these folks is that many are feeling the same way you are, we have to admit that it is our very own fault...our fault for not supporting policy that gets things done. Less government, some regulation, tougher requirements for social welfare, tax incentives for businesses to bring jobs back, a pull out from Iraq/Afghan and higher taxes is what will get us out of this crisis. Only then, will we be able to start over as a nation, we should be focused on being #1 or a close #2 in various industries and stop financing our GDP on equity.

@BAP33 @TATUP

And I can agree with your points, so here we are. We agree the standards changed (1). Those changes resulted in more buyers(2). More buyers drive prices up(3). From there the monster grew(4). So, we agree.

The devil is in the details though where CRA, Frank, Barry, ACORN, and Fanny are concerned, so if you agree, we can detail each step in order. .

I agree that more buyers equals higher prices however can you folks agree that there is a need and role within lending for CRA, FHA, Fair Housing Act?

I recently read that FHA was created in response to the crash of 1929 and the associated programs gave banks confidence to start lending after the crash. Almost immediately after the creation of FHA the practice of "redlining" certain neighborhoods began. Oddly enough, the practice of "redlining" is actually noted as originating within the Federal Housing Administration (FHA) in the 1930s. You may already know this, however, redlining refers to the discriminatory credit practices against low-income neighborhoods in which lenders would not lend monies to these neighborhoods. Congress passed the CRA Act in 1977 to reduce this practice, whereby there was 47 years of inaction that had passed before anything was done to increase investment in lower income neighborhoods. The law, however, emphasizes that an institution's CRA activities should be undertaken in a safe and sound manner, and does not require institutions to make high-risk loans that may bring losses to the institution. The CRA followed similar laws passed to reduce discrimination in the credit and housing markets including the Fair Housing Act of 1968, the Equal Credit Opportunity Act of 1974 and the Home Mortgage Disclosure Act of 1975. The Fair Housing Act and the Equal Credit Opportunity Act prohibit discrimination on the basis of race, sex, or other personal characteristics.

I do not see how the CRA caused the bubble as it was the Gramm-Leach-Bliley act that allowed the creation of Alt-A loans which were not previously available to the lower economic demographics. Prior to Gramm-Leach-Bliley lower economic communities were not afforded 400k, 500k loans.

Your thoughts?

@BAP @TATUP

Here is how Gramm-Leach-Bliley reduced the effectiveness of CRA:

From Wiki

In conjunction with the above "Gramm-Leach-Bliley Act" changes, smaller banks would be reviewed less frequently for CRA compliance by the addition of §2908. (Small Bank Regulatory Relief) directly to Chapter 30, (the existing CRA laws), itself. The 1999 Act also mandated two studies to be conducted in connection with the "Community Reinvestment Act":

the first report by the Federal Reserve, to be delivered to Congress by March 15, 2000, is a comprehensive study of CRA to focus on default and delinquency rates, and the profitability of loans made in connection with CRA; the second report to be conducted by the Treasury Department over the next two years, is intended to determine the impact of the Act on the provision of services to low- and moderate-income neighborhoods and people, as intended by CRA.
On signing the "Gramm-Leach-Bliley Act", President Clinton said that it, "establishes the principles that, as we expand the powers of banks, we will expand the reach of the [Community Reinvestment] Act"

My point is that there is a need for the CRA but we need to reverse GLB act of 1999 passed by Clinton.

Nice going whitney...

@BAP

@ justme …. for old times sake …. if CRA did anything, good or bad, bubble or no, what did it do after the changes Komrade Klinton made? What action or activity would you point to and say “this right here was due to the CRA using the new Klinton guidelines and supporting legal structure”. Anything justme, please. Thanks.

If you acknowledge that the GLB act of 1999 removed regulation that allowed the CRA to loosen its lending policies why not blame GLB?

justme says

Here is another solid debunk of the old “CRA caused the housing crash” baloney:

http://krugman.blogs.nytimes.com/2009/11/02/cre-and-the-cra/

Also you can follow several links to read more.

Im not sure why one would use Harvard Joint Studies on Housing as good source of facts
or even opinion. Fact is their former studies from 2004 to later part of the decade, misread
the RE market, and they concluded wrongly there was no bubble, nor was there a risk of any
declines to occur. They spoke about rising demand, population growth and all other matrix.
As such they turned out to have been discredited by the fact prices have and are collapsing.

And who funded Harvard Studies for the past several years.
America’s Community Bankers
Fannie Mae Foundation
Federal Home Loan Banks
Freddie Mac
Housing Assistance Council
Mortgage Bankers Association
National Association of Affordable Housing Lenders
National Association of Home Builders
National Association of Housing and Redevelopment Officials
National Association of Local Housing Finance Agencies
National Association of Realtors
National Council of State Housing Agencies
National Housing Conference
National Housing Endowment
National League of Cities
National Low Income Housing Coalition
National Multi Housing Council
U.S. Conference of Mayors

4X, I agree with your reasoning.

I actually "blame" the removal of lending standards - and however that was done is the "cause", I would guess. In the thread where we all laid out how we felt this thing got done to us, I put loose lending as the first action required for this bubble.

Some people could not be bothered to read what Krugman said before disagreeing, so I will post what he said for the record:

Zombies, zombies, everywhere. One of the enduring myths of the financial crisis has been the claim that it was the result of (a) Fannie and Freddie (b) the Community Reinvestment Act, which forced poor, helpless bankers to make loans to you-know-who. It’s a myth that won’t go away — I get asked about it almost every time I give a public lecture — even though it has been extensively debunked. (See, e.g., here.)

But reading this scary piece about commercial real estate, I realized that CRE offers yet another debunking. After all, there was no federal act driving banks to lend money for office parks and shopping malls; Fannie and Freddie weren’t in the CRE loan business; yet 55 percent — 55 percent! — of commercial mortgages that will come due before 2014 are underwater.
The lenders didn’t need government urging to dive deep into a property bubble, and drown.

You can stick that in your pipe and smoke it. Or take it to the bank. Or whatever. Just don't ignore the obvious truth.

BAP -please don't try to use common sense to make any point here. Many simply can't handle it.

kRuGmAns OPINION is just that - an opinion. Government mandated loose lending policies like CRA were at the root of our financial meltdown no matter how much liberal spin is put on the issue.

Social, feel good, programs are designed to help the poor, pander for votes and warm the hearts of the gullible...but what they really do is put more power in the hands of sociopathic bureaucrats.

Honest Abe is another person that cannot be bothered with facts. In fact, when he disagrees with fact, he tries to get around the fact by labeling the fact as "opinion".

Is that not Dishonest, Abe?

Honest Abe says

kRuGmAns OPINION is just that - an opinion. Government mandated loose lending policies like CRA were at the root of our financial meltdown no matter how much liberal spin is put on the issue

True, he states an opinion. But unlike you, he backs it up with facts. See below:

justme says

After all, there was no federal act driving banks to lend money for office parks and shopping malls; Fannie and Freddie weren’t in the CRE loan business; yet 55 percent — 55 percent! — of commercial mortgages that will come due before 2014 are underwater.

If the CRA had anything to do with the bubble, why are we seeing the same thing in commercial real estate?

@BAP

OK, you agree that loose lending standards were a cause--that's not exactly going out on a limb there. Even after seeing all the evidence here, you still refuse to admit that the CRA was a non-event in the housing bubble?

well .. yes, I refuse to admit the CRA was a non-event .. until I am shown what the CRA did do. Share with me what the CRA "HAS DONE" 100% unavoidable actual action atributed to ONLY the CRA 100% (since the Clinton changes were put into affect) .. please do that for me so I can see what you ARE willing to give the CRA credit for ... and then, if I can see what you do feel the CRA has done since Clinton's changes, then - maybe - we can get someplace.

I also notice you did not say you agree with the "loose lending was the start of this problem". Do you agree? No limbs needed. lol

justme says

Honest Abe is another person that cannot be bothered with facts. In fact, when he disagrees with fact, he tries to get around the fact by labeling the fact as “opinion”.

warning - that quote is just an opinion. Irony rocks!! lmao

Bap33 says

well .. yes, I refuse to admit the CRA was a non-event .. until I am shown what the CRA did do. Share with me what the CRA “HAS DONE” 100% unavoidable actual action atributed to ONLY the CRA 100% (since the Clinton changes were put into affect) .. please do that for me so I can see what you ARE willing to give the CRA credit for … and then, if I can see what you do feel the CRA has done since Clinton’s changes, then - maybe - we can get someplace

I give the CRA credit for basically nothing. I think it had VERY little to no effect at all on creating the housing bubble. I thought I had already posted this several times, but I can do it again. Also not sure how that helps your understanding...

Once more, greatly simplified--Once mortgages were bundled and sold as securities with AAA ratings, there was a huge demand for them because their risk was understated. This demand created an environment where lending standards were slowly eroded creating the housing bubble.

Bap33 says

justme says

Honest Abe is another person that cannot be bothered with facts. In fact, when he disagrees with fact, he tries to get around the fact by labeling the fact as “opinion”.

warning - that quote is just an opinion. Irony rocks!! lmao

Bap33, only in your opinion.

(fer old times sake :-))

@justme .lol

@tatupu, I did not ask for CRA's actions specific to bubble ... sorry if that is how it reads ... what I want is to know what action, any action / effect / whathaveyou would you point to and say, "THIS was done due to the CRA in the time since Clinton changed the goverening mandates." Anything at all, not just something bubble related. Tell me something that you feel the CRA is responsible for in the time frame since the changes Clinton made. And for extra help to my understanding, explain why Clinton made changes and what you feel those changes helped to attain. Thanks.

Bap33 says

@tatupu, I did not ask for CRA’s actions specific to bubble … sorry if that is how it reads … what I want is to know what action, any action / effect / whathaveyou would you point to and say, “THIS was done due to the CRA in the time since Clinton changed the goverening mandates.” Anything at all, not just something bubble related. Tell me something that you feel the CRA is responsible for in the time frame since the changes Clinton made. And for extra help to my understanding, explain why Clinton made changes and what you feel those changes helped to attain. Thanks.

Why do I feel like I'm back in school and this is my term paper assignment? I thought this board was in reference to the housing crash.

I could do some more research to better answer, but off the top of my head I don't think the CRA has done much of anything. Clinton made changes because it had no teeth--banks were ignoring it entirely. Some studies say it has modestly improved lending to inner cities, but most say its effect has been minimal.

tatupu70 says

Clinton made changes because it had no teeth–banks were ignoring it entirely. Some studies say it has modestly improved lending to inner cities, but most say its effect has been minimal.

Tatupu, sorry for the term paper thing. I was trying to tie stuff together with your answer. I agree, this site is bubble related, and I contend that the CRA played a role where you say no it did not. Your post says two things that we can go off of, and sneak over into the bubble arena. lol

#1) you say Clinton took action to give teeth to something that you say was doing nothing pre-Clinton and did nothing post-Clinton. Is that what you meant?
#2) You site "some studies" as having improved lending to "inner cities". Inner cities are locations, not people. No lender that I know of gives loans to locations, so maybe we can adjust that area of your point? Do you contend that there are boundaries that RE-lenders operate inside of? Thanks.

I agree, if the CRA can be absolved of any bubble involvement as soon as we can figure out what it can get credit for. Lets not forget, Barry and ACORN did sue the bank, so something must be somewhere. Right? lol

@Thomas.Wong

Are you saying that the GLB act is being used to extend CRA benefits through unethical coercion? Do you agree the act is the root cause of our problems?

Clarify your statement so I can better understand your point.

@BAP

No problem. I was just having nightmares about my youth...

Bap33 says

#1) you say Clinton took action to give teeth to something that you say was doing nothing pre-Clinton and did nothing post-Clinton. Is that what you meant?

Pretty much.

Bap33 says

#2) You site “some studies” as having improved lending to “inner cities”. Inner cities are locations, not people. No lender that I know of gives loans to locations, so maybe we can adjust that area of your point?

Sorry--how about I say "some studies say it slightly improved lending to people in inner cities." Does that help?

Bap33 says

Do you contend that there are boundaries that RE-lenders operate inside of? Thanks.

Well, that is the point of the CRA. To encourage lending within specific boundaries (usually inner cities).

tatupu70 says

Do you contend that there are boundaries that RE-lenders operate inside of? Thanks.
Well, that is the point of the CRA. To encourage lending within specific boundaries (usually inner cities).

Alrighty ... now we are getting someplace. Your point is that the CRA was "intended" (common liberal issue - good intentions. lol) to "encourage" banks to give risky loans. And, "some studies" indicate that Clinton made the changes he did inorder to help "mystery enforcement entities" better exact their "encouragement". This pretty much matches your point and view, correct?
Well ... if we repalce "mystery enforcement entities" with ACORN or B.O., then the story is still historicaly accurate, as that did happen.
But, when we look at "encourage" and it is replaced with "take legal action against", it sure seems much more direct and threatening ... but since ACORN and B.O> did do just exactly that, it too fits.
So, now that Clinton made changes, we have the "intentions" of the CRA being used to exact the will of particular groups and organizations and people upon lending banks .... as it was intended to do.

But wait, there is a little problem. You suggest there are boundries between banks, or at least that the CRA's supporters give that impression. I submit to you that THAT is absolute non-sense. And THAT is why the "intentions" of the CRA that were focused on subsidizing a particual group of risky loans were able to infect all lending standards at all institutions. You see, a few banks got taken to court because people that had no lending background were demanding that loans be given to unqualified buyers, and those same entities used the CRA as their step-stool (right or wrong). As soon as a few banks were taken to court under the CRA intentions, guess what ... ALL LENDERS had that as a reason to get busy writing loans to unqualified buyers. If any lender were to turn away any buyer they would be held responsible to ACORN or B.O. or B.Frank. And, as I pointed out, all lenders operate under the same laws in all areas or a state (pretty much), so there is no magical line that makes it legal for a lender to discriminate against a brown-buyer in Fresno and not discriminate against a black-buyer in Dos Palos. ANd because there is no magic boundries, the lenders WERE FORCED BY THE CRA's GOOD INTENTIONS to grant unqualified buyers loans in all areas. The end. Thanks.

Bap33 says

Alrighty … now we are getting someplace. Your point is that the CRA was “intended” (common liberal issue - good intentions. lol) to “encourage” banks to give risky loans.

Did I miss something? Please point out where in my post that I ever wrote the word "risky". I'll save you the time because you won't find it. That's you putting words in my mouth (or post).

The theory--whether you agree or not--was that banks were not lending to qualified applicants in inner cities. Perhaps because of discrimination, perhaps because they just weren't familar enough with the area, who knows the reasons. In any event, the CRA was designed to try to level the playing field. Not distort it. So banks would make loans to qualified people in inner cities just like they do in wealthier areas.

Bap33 says

You see, a few banks got taken to court because people that had no lending background were demanding that loans be given to unqualified buyers, and those same entities used the CRA as their step-stool (right or wrong).

Really? Are you sure they were unqualified? Do you have evidence?

Bap33 says

As soon as a few banks were taken to court under the CRA intentions, guess what … ALL LENDERS had that as a reason to get busy writing loans to unqualified buyers

That's where your logic just goes haywire. It makes zero sense. Countrywide is exempt from the CRA, but they would start making bad loans because a bank was sued? Why exactly would they do that? Countrywide couldn't be held accountable--they were exempt.

Bap33 says

And, as I pointed out, all lenders operate under the same laws in all areas or a state (pretty much), so there is no magical line that makes it legal for a lender to discriminate against a brown-buyer in Fresno and not discriminate against a black-buyer in Dos Palos.

I think you are confused about the CRA. It has zero to do with race. Here are some explanations from Wiki:

"The CRA was passed as a result of national pressure to address the deteriorating conditions of American cities—particularly lower-income and minority neighborhoods"

"The Community Reinvestment Act of 1977 seeks to address discrimination in loans made to individuals and businesses from low and moderate-income neighborhoods"

Now, you're right--there are other laws preventing discrimination against borrowers based on race. Fair Housing Act, Equal Credit Opportunity Act to name a couple. But not the CRA. That deals solely with particular areas.

So, again. Your argument is completely refuted by the facts. Look at where the foreclosures took place. Look at the commercial real estate bubble. Look at the rate of inner city foreclosures (CRA areas) versus the US in general. All of these stats show that the CRA had no effect on the housing bubble.