There are also subsidies to certain types of mortgages. The Community Reinvestment Act bans so-called ‘red lining’ -- requiring banks to offer mortgages in the entire geographic area in which they operate, not just to do business in suburbs. Loans in profitable areas were then used to subsidize loans in areas where banks were losing money.
John Lott Jr., “Reckless mortgages brought financial market to its knees”, Fox News
Thursday, September 18, 2008
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