This may be the most amazing story I've ever read in my local paper, the Orange County Register.
The Register conducted an analysis of more than 12 million subprime mortgages worth nearly $2 trillion that showed most of the lenders who made risky subprime loans were exempt from the Community Reinvestment Act. As the Register notes, the CRA has been used by the right as the smoking gun of liberal responsibility for the mortgage meltdown:
From the editorial pages of The Wall Street Journal to talk shows to the op-ed page of The Register, people are charging that the Community Reinvestment Act of 1977 forced banks to make bad loans, leading to financial Armageddon.
There's just one problem: It isn't true.
In fact, the article notes it was an almagam of state and federally regulated mortgage companies who were exempt from the CRA law that made up the most -- 75% -- of the sub-prime loans.
To its credit, the Register then lists exactly which right-wing media made these claims, what they said and when, including an op-ed in the Register's own pages by Chapman University President James Doti, long lionized here as an expert on the local economy in the OC.
They then point out that the subprime loan mecca was here in OC, the heart of conservatism:
In its glory days, subprime lending was a lucrative business that paid six-figure salaries to 20-something salespeople and made fortunes for top execcutives. Nowhere were the riches more evident than in Orange County, home to industry giants New Century, Ameriquest, Argent and Fremont.
I have never seen anything like this in the Register, or any paper, where it fact-checks the right wing "common wisdom" and finds it to be complete bunk. And then places the blame squarely where it belongs -- on mortgage companies in its own backyard trying to make a quick, easy buck. No pulling punches, no BS equivalence to make the story "balanced."
The final coup de grace:
The criticisms of the reinvestment act don't make sense to Glenn Hayes. He runs Neighborhood Housing Services of Orange County, which works with banks to provide CRA loans to first-time homebuyers. In its 14-year history, the nonprofit has helped 1,200 families buy their first homes. Score so far: No foreclosures and a delinquency rate under 1 percent.
"It is subprime that's really causing it," Hayes said of the mortgage crisis. "But CRA did not force anyone to do subprime."
I just got through slamming the Register in a diary yesterday, though mostly for its editorial pages. But this story was in the same issue.
Kudos to my hometown paper.