[lbo-talk] blame Clinton

[Jordan Hayes]

>> Litan suggested that the 1990s enhancement of CRA, which was
>> achieved over Gramm's fierce opposition, may have contributed
>> to the current crisis. "If the CRA had not been so aggressively
>> pushed," Litan said, "it is conceivable things would not be quite as 
>> bad. People have to be honest about that."

Sometime last year, I found an interesting graph published at S&P about 
the percentage of mortgages that were written using 1-2 years worth of 
income documentation, 2 or more years, "verbal verification" and no 
information whatsoever.  As recently as the 1st quarter of 2005, it was 
something like 85% were based on 1-2 years, with the other three 
categories splitting the rest -- 90% was at least 1 year of 
documentation.

There was a big jump in "no doc" loans the next quarter (around 20% of 
the total?) and in the 3rd quarter it was up to more than 50% of all 
loans!  It hasn't been that high since then, but as recently as 3Q of 
2007 it was still above 30% ...

If "Clinton's policies" were responsible for this, he's got a mighty 
long reach.

http://www2.standardandpoors.com:80/spf/docimg/618589_GRAPH4308421.gif

/jordan