Keep More Mortgage Lenders in Line with an Expanded CRA

The Community Reinvestment Act (CRA) is a 1977 law which currently covers some but not all mortgage loans.  It doesn’t cover loans from any mortgage companies, and only covers loans from banks in certain circumstances.  CRA is incredibly effective when it is allowed to be.

• FACT:  Only 6% of subprime mortgage loans were covered by the CRA.

• FACT:  The other 94% of subprime mortgage lending was not covered by the CRA.

• FACT:  Federal regulators are considering expanding CRA to cover more loans in the future.

Even if you’ve never heard of CRA, expanding it will be good for you, unless you plan to open a mortgage company and issue toxic mortgage loans to poor people once credit starts flowing again.  Otherwise, an expanded CRA will help you because it will prevent foreclosures and another foreclosure-prompted economic crisis.

Fortunately, federal regulators are considering expanding and modernizing CRA.  They’re holding hearings around the country and taking comments from the public about how to do it.   You can submit a comment here.  Tell federal regulators how the economic crisis has impacted you – now is the moment to weigh in.

For detailed information about CRA, visit the Woodstock Institute.