Another problem is the Community Reinvestment Act; this appears to be at the crux of the entire sub prime problem. The Community Reinvestment Act, was pushed under the guise of making home owners out of everyone. The problem comes when many were not prepared to be homeowners .Lending standards were thrown out the window to meet this noble goal and lending institutions were basically forced to throw money out the window, by luring weak buyers with no money down and enormous mortgages thus creating the sub-prime lending mess.
From my under standing this act has not been addressed by the bail out bill and if anything could be perceived to encourage more bad behavior,with the "foxes watching the hen house nature of this bill"
My view would be to modify the act and make it more realistic by encouraging and rewarding saving and investment instead of paying off political constituencies with irresponsible lending practices.
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