Home mortgage

People ask, how did the mortgage crisis start and the answer is that between 1975 and 1982 congress passed four laws that were designed to help poor people get into their own home. The first, passed in 1975, was The Home Mortgage Disclosure Act which mandated that banks report their loan data. This gave congress access to who banks were loaning. The second, passed in 1977, was the Community Reinvestment Act. This Act required banks to make loans to people in low and moderate income neighborhoods. The third, passed in 1980, was The Depository Institutions Deregulatory and Monetary Control Act. This Act allowed banks to charge a premium interest rate on certain loans. The forth, passed in 1982, was The Alternative Mortgage Transaction Parity Act which allowed for variable interest rates and the use of balloon payments. These four laws were the birth of the subprime mortgage market and forced banks to loan money to low income people. Some of the same congressmen who passed these laws are now complaining of how banks took advantage of people and put them into loans they could not repay The crisis that started in 2008 was just one more example of the unintended consequences of good intentions. The very poor people they set out to help are now suffering the most.