After what seemed like a lifetime of thirty-Year adjustable-rate mortgages, with monthly mortgage payments going up all the time, The "123 Mortgage Refinance" helped me to lock in a great low fixed rate of 3.16%, helping me to guarantee myself the ability to always make my mortgage payment on time with money to spare.

This is simply hogwash! I sat on the board of a local bank for 11 years we were repeatedly reminded (coerced) by the OCC to advertise to people fitting profiles that were not good credit risks. We were also repeatedly reminded that our loan portfolio did not match our community demographics.

Another political spin response from the Times. They failed to tell the truth of what occured during the Clinton Administration, referring back to 1977. Research the facts. Banks were threatened if they did not make risky loans to those who could not afford homes. "Teaser" fist year low interest rates on "flexible" or "variable rate" loans. The results are facts that the Times or the left cannot spin away. Many got loans that should not have. When their interest rates went up, they could not afford them. Many over bought large homes.

Many simply did not pay their mortgage for months until foreclosure, an expensive, time consuming process for banks, which we all paid for in their increased overhead. Fanny Mae and Freddy Mac lost too.

The "unintended consequences" of the "chicken in every pot" theory at the time. There is no free lunch.

Another non-factual article from the Times, with no research, fact check, or reality.

Don't let them tell you this economic meltdown is a complicated mess.It's not. Our national financial crisis is readily understood byanyone who has seen greed and hypocrisy. But we are now witnessingthem on a profound, monumental scale. Conservative Republicans always want the government to stay out ofbusiness and avoid regulation as long as they are making lots ofmoney. When their greed, however, gets them into a fix, they are thefirst to cry out for rules and laws and taxpayer money to bail outtheir businesses. Obviously, Republicans are socialists. The Taxpayers didn't get to enjoy any of the big moneyprofits on the phony financial instruments like derivatives orbundled sub-prime paper, but we get the privilege of paying for theirdebt and failures. Let's just consider the money. The public bailout of insurance giant(becoming a dwarf) AIG is estimated at $85 billion. According to onereport, that's more than the Bush administration spent on Aid toFamilies with Dependent Children during his entire time in office.
How did we get here? That's pretty easy to answer, too. His name is Phil Gramm. A few daysafter the Supreme Court made George W. Bush president in 2000, Grammstuck something called the Commodity Futures Modernization Act intothe budget bill. Nobody knew that the Texas senator was slippingAmerica a 262 page poison pill. The Gramm Guts America Act was designed to keep regulators from controlling new financial toolsdescribed as credit "swaps." These are instruments like sub-primemortgages bundled up and sold as securities. Under the Gramm law,neither the SEC nor the Commodities Futures Trading Commission (CFTC)were able to examine financial institutions like hedge funds orinvestment banks to guarantee they had the assets necessary to coverlosses they were guaranteeing. This isn't small beer we are talking about here. The market for thesefancy financial instruments they don't expect us little people tounderstand is estimated at $60 trillion annually, which amounts toalmost four times the entire US stock market. And Senator Phil Gramm wanted it completely unregulated. So did AlanGreenspan, who supported the legislation and is now running around tothe talk shows jabbering about the horror of it all. Before thehighly paid lobbyists were done slinging their gold card guts aboutthe halls of congress, every one from hedge funds to banks wereplaying with fire for fun and profit. Gramm didn't just make a fairy tale world for Wall Street, though. Heincluded in his bill a provision that prevented the regulation ofenergy trading markets, which led us to the Enron collapse. There wasno collapse of the house of Gramm, however, because his wife Wendy,who once headed up the Commodities Futures Trading Commission, took ajob on the Enron board that provided almost $2 million to theirhousehold kitty. And why not? Wendy got a CFTC rule passed that keptthe federal government from regulating energy futures contracts atEnron. If John McCain gets elected and chooses Phil Gramm as his TreasurySecretary, which many politico types see as likely, they will be ableto talk about the good old days when Gramm was in congress and McCainwas in the senate and they were in the midst of the Savings and Loancrisis. The S and L scandal, which may look precious when compared to ourpresent cascade of problems, isn't hard to understand, either. But itis impossible to take John McCain seriously on our current financialArmageddon since he was dabbling in the historic collapse of 747 S&Lsthat occurred during Ronald Reagan's era. In the early 80s under theRepublican president, congress deregulated the savings and loanindustry in much the same way that Gramm made sure there were no lawshindering our current financial malefactors on Wall Street. S&Lssimply lobbied until they had less regulation and then began makingrampant, unsound investments. The guy who was going the wildest with financial freedom was CharlesKeating, who headed up Lincoln Savings and Loan of California.Because the S&L industry had managed to get congress to increase FDICinsurance from $40,000 to $100,000 on deposits, the irresponsibleinvesting of people like Keating began to put taxpayer insurancefunds at great risk of loss. Keating placed money in junk bonds andquestionable real estate projects and because so many other S&Lsstarted acting the same way the Federal Home Loan Bank Board (FHLBB)began to push for a regulation that limited these dangerousspeculative "direct" investments to 10% of an S&L's assets. And Keating didn't like it; he called on a private economist namedAlan Greenspan, who promptly produced a study saying that there wasno danger in "direct" investments.But that didn't convince the FHLBB and as further scrutiny showedLincoln Savings and Loan was making even more historically badinvestment decisions, a federal investigation was launched. So Keating called his home state senator John McCain. McCain and four other US senators (known to history as the KeatingFive) met with Edwin Gray, then chairman of the FHLBB. McCain hadbeen hesitant to attend but had reportedly been called a "wimp"behind his back by Keating. The message to the FHLBB and Gray fromthe Keating Five was to lay off Lincoln and cool the investigation.Gray and the FHLBB did not relent but Lincoln stayed in businessuntil 1989 when it collapsed with the rest of the S&L industry. Thelife savings of more than 20,000 elderly investors disappeared withthe failure of Lincoln. Keating went to prison for five years. Charles Keating was John McCain's pal. They met in 1981 and Keatingdumped $112,000 in the McCain campaign bank accounts between '82 and'87. A year before McCain met with the FHLBB regulators, his wifeCindy and her father, according to newspaper reports at the time,invested about $360,000 in one of Keating's shopping centers.TheArizona Republic reported McCain and his wife and their babysittertook nine trips on Keating's private jet to the Bahamas to stay atthe S&L liar's decadent Cat Cay resort. The senator didn't payKeating back for the plane rides until years later when he was underinvestigation. McCain wasn't found guilty of anything but bad judgment, which is anhistoric understatement. Republicans, who led deregulation of the S&Lindustry, delayed the bailout until after the 1988 election to makesure George H. W. won the White House. The cost to taxpayers forhelping these 747 bad actors in the S&L industry was finallyestimated at $1.4 trillion. If the bailout had begun in 1986 insteadof after the presidential election, the cost would have beencontained at $20 billion. And now the Republicans who engineered our present crisis and got usinto the S&L debacle of the 80s are before us saying the markets needregulation. No, actually, they don't need regulation. Why don't youRepublican capitalists who believe in the free markets get out of thedamned way and let them work and allow these various financialnuthouses be crushed by the weight of their own stupidity? When it isall over, we'll have sane and sober people create laws to make sureit doesn't happen again, assuming we survive this chaos. Also, while you are handing out our tax money to idiots on WallStreet, save a little of the long green for the unemployed auto andconstruction workers and all of the other people who have lost theirjobs because you were too stupid to notice what Phil Gramm was doingand you were convinced everything was going to be just fine becausethe markets work. These, then, are the people -- the Republicans -- who want to run ourgovernment for four more years. John McCain isn't just one of them.He rides their jets. He takes their campaign donations. He makes themhis campaign advisors. And he tells us to trust him. He must think we are a nation of village idiots. Hell, maybe we are.

This is moving the goalposts somewhat, but as Steve Sailer and others have noted, repeatedly, it was not only the CRA but the entire zeitgeist of 'home ownership for our ever increasing "minority" population' which put pressure on financial institutions to write rubbish loans. Here is George Bush from 2002

---
More and more people own their homes in America today. Two-thirds of all Americans own their homes, yet we have a problem here in America because few than half of the Hispanics and half the African Americans own the home. That's a homeownership gap. It's a -- it's a gap that we've got to work together to close for the good of our country, for the sake of a more hopeful future. We've got to work to knock down the barriers that have created a homeownership gap.

I set an ambitious goal. It's one that I believe we can achieve. It's a clear goal, that by the end of this decade we'll increase the number of minority homeowners by at least 5.5 million families. (Applause.)
...
I appreciate so very much the home owners who are with us today, the Arias family, newly arrived from Peru. They live in Baltimore. Thanks to the Association of Real Estate Brokers, the help of some good folks in Baltimore, they figured out how to purchase their own home. Imagine to be coming to our country without a home, with a simple dream. And now they're on stage here at this conference being one of the new home owners in the greatest land on the face of the Earth. I appreciate the Arias family coming.

http://www.freerepublic.com/focus/f-news/2094023/posts

---
(Notice, BTW, the Bush totally dropped the pretense that this was for the 'poor' -- its all about mobilized population groups, and none about Billy Bob from Sawtooth Gap, W V. )

There is plenty of blame to go around, from the easy money policy of the Fed to the guys at S & P etc. who failed to see that the demographics upon which their foreclosure-risk models were built were shifting under their feet, to the perverse incentives of allowing mortgage originators to sell of their loans without keeping 'skin in the game'. But underlying all that was a mountain of bad debt, bad debt disproportionately owed by Latinos and African-Americans (foreclosure rates per loans issue 70 and 74 percent higher than the white rate respectively). Those groups are precisely those groups which the CRA and similar programs and bully-pulpit speeches were trying to 'help'.

@Granden -- Home ownership was about 64% when the CRA was enacted. In 2000 -- after eight years of supposed Clinton administration hectoring of banks -- it was 66%. See http://www.census.gov/hhes/www/housing/census/historic/owner.html

That's a 2 percentage point increase over the course of 20 years.

@Steve -- How did your CRA loans perform?

The LA Times is not going to admit that "Progressives" caused the housing collapse (and ultimately, the collapse of the domestic, and then international economy.) It's cognitive dissonance at its most intense.

The evidence is quite clear, and despite efforts to rewrite history, the record will show that ethnic politicizing of home ownership debauched underwriting standards, drove quasi public institutions (fannie et al) to bankroll high risk financial instruments with taxpayer dollars, and induced pressure on all manner of financial institutions to conform to PC standards of business. Whether or not the loans were monitored by the CRA is irrelevant.

Having Angelides, CA's leading advocate for "affordable housing" as the investigatory committee chair, turned the entire examination into political theater. You morons really think no one is watching, but there are more and more citizens who are beginning to understand what happened here. The media doesn't hold all the information cards anymore, you can't flush the existing documents down a hole of history, and you can't lie your way out of complete policy failure. From your own archives:

12/4/1997 http://pqasb.pqarchiver.com/latimes/access/44784390.html?dids=44784390:44784390&FMT=ABS&FMTS=ABS:FT&type=current&date=Dec+24%2C+1997&author=Peltz%2C+James+F&pub=Los+Angeles+Times&edition=&startpage=D1&desc=SMALL+BUSINESS%3B+Rights+Group+Finds+Mortgage+Lending+Bias%3B+Banking%3A+Flawed+credit-scoring+system+blamed+for+declining+home+ownership+among+minorities.

The big risk in the mind of Fed officials in the early 2000s was deflation. The effect of their response was to push more of our economy into housing and home construction. The financial sector found ways to exploit this to obtain out-sized profits in the short term; they saw that loans to poor credit risks, people who paid higher interest rates and incurred late payment fees, were more profitable than other loans and they decided since all real estate markets nationwide had never fallen at the same time that it was safe to make these more profitable loans as long as they had loans in multiple markets. Couple the poor assumptions and decision making by financial institutions with massive flows of global capital and the result was the bubble.
CRA, it's incentives and coercion, may have played a small role in the crisis but the main culprits are the fools who thought that a diversified pile of dreck loans was as safe as T bills. It may provide an argument for the always blame government crowd, but the authors are correct, the CRA was insignificant compared to the other market forces in play at the time.

The government through Fannie and Freddie caused the mortgage mess. Democrats laid the frame work for this and should own up to their complicity in what happened.

Okay, Times, we get it. You've decided the CRA was a wonderful idea, and it's all Bush's and Reagan's fault. We'll let history judge the CRA.

The Times staff keep repeating a mantra of their own, that "the data" doesn't support any role that the federal government had with the sub-prime meltdown, other than a shortage of Obamaesque regulations.

Pray tell, do the words and actions of the then-House Finance Committee Chair Barney Frank leading up to the failure of Fannie Mae and Freddie Mac, which happened on HIS watch, count as "data"?