New York's savings banks already hold large numbers of defaulted mortgages, including many inner city properties....We raise a strong word of caution against the expectation that bank credit is a substitute for the wages, salaries and other income that are needed to keep a community alive economically. The Times, by now sounding a more familiar note, warned in 1994 that the Community Reinvestment Act "requires banks to meet the credit needs of all neighborhoods in a bank's service area." Mortgage risks could be passed on to the secondary mortgage market by Fannie Mae and Freddie Mac in Washington, D.C., backed by an implicit federal guarantee.
Crediting the Uncreditworthy Tom Bethell The American Spectator; Nov 2008; 41, 9; Docstoc pg. 42 Reproduced with permission of the copyright owner
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