The Community Reinvestment Act which was first introduced in 1977 and upgraded by former President Bill Clinton in 1995 encouraged Fannie Mae “to enable mortgage companies, savings and loans, commercial banks, credit unions, and state and local housing finance agencies to lend money to home buyers. It also encouraged the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, to buy mortgages on the secondary market and sell them as mortgage-backed securities on the open market.”
Yesterday, Senator Michelle Bachmann - Republican from Minnesota - stated that Clinton, African Americans, Hispanics and other minorities are to blame for the economic woes that the country is currently facing.
She stated that “the federal government has been forcing banks to make bad loans to unqualified or sub-prime borrowers for more than 30 years under the 1977 Community Reinvestment Act. Such loans comprise a large portion of all the sub-prime foreclosures.”
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