Archive for October, 2008

A leadership crisis or housing crisis . . . you decide.

October 10, 2008

Judith Bell, President of Policy Link, has an excellent entry on their equity blog. Click on the following link to understand, honestly, how the Community Reinvestment Act (CRA) passed by Congress in 1977 was not the reason for the implosion of the WORLD-WIDE housing market. Just look to other countries for examples of weakened housing markets that were never subject to CRA regulations.

Gail Cincotta and Art Naparstek, two great leaders now deceased, who spearheaded efforts to develop and pass the Home Mortgage Disclosure Act (HMDA 1974) and the Community Reinvestment Act (CRA 1977) knew in the early 1970s that the problem with the home mortgage industry wasn’t just about resources, it was about INFORMATION.

Our current housing crisis is no different. This crisis is about the lack of transparency on the front end (e.g., no money down, fee-heavy mortgage transactions with lots of fine print) and deception on the back end (e.g., when the paper representing mortgage-backed securities was packaged and sold as golden, when in fact it was nothing more than rotting fish scraps wrapped in old newspaper).

This crisis is not a housing crisis, it is a crisis of leadership and stewardship of public and private resources at the highest level of our government and corporate sectors. I suggest we offer a “buyout” not a “bailout” to these leaders.