Despite an immediate burst of rhetoric to the contrary, Treasury today released an astonishingly-progressive set of recommendations to reform implementation of the Community Reinvestment Act (CRA). If these are taken up by the federal banking agencies – and they will be – banks would do more for their communities and thus rely a lot less on FHA/GSE lending to show they care even when they really don’t. The bank mortgage-origination share for FHA and the GSEs is thus likely to drop still lower.
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