The Community Reinvestment Act of 1977 forced banks to lend a certain percentage of their mortgage money to people who couldn’t afford repayment. In 1996, the applicable percentage was raised to 42 percent. In 2005, the required rate reached 52 percent. By then, if a bank didn’t lend over half of its mortgages to people who couldn’t afford repayment, regulators could put the bank out of business. Desperate to meet the requirements, banks had to disregard fraud and omissions in mortgage applications. The result was widespread foreclosures.
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