NeighborWorks Chief Defends CRA Lending

The chief executive of NeighborWorks America said some people are "misinformed" about the role that loans made under the Community Reinvestment Act have played in the current mortgage crisis. Kenneth D. Wade, in an interview with MortgageWire during the Mortgage Bankers Association annual convention in San Francisco, said there is "no basis" for saying these loans are responsible for the industry's problems. In conversations he has had with financial institutions, their CRA portfolios are performing fine, if not better than their regular portfolios, he said. Many of the now infamous subprime lenders were not subject to CRA, Mr. Wade added. CRA, he said, is an "easy, convenient target." NeighborWorks America has not seen an appreciable change in the demand for its services because of the ban on seller-funded down payment assistance. There is an impression that Congress has shut down all forms of down payment assistance programs, but programs that involve grants or loans, such as state housing finance agency programs, are still permissible and performing quite well, he said.