Subprime mystery solved

Conservative pundits desperate to shift blame for the mortgage mess away from those "greed is good" types have been sinking their teeth into the Community Reinvestment Act of 1977. Their claim is that banks were forced to make bad loans, leading to financial Armageddon. The only trouble is that it's not true - and now the OC Register has quantified it. A Register analysis of more than 12 million subprime mortgages worth nearly $2 trillion shows that most of the lenders who made risky subprime loans were exempt from the CRA (nearly $3 of every $4 in subprime loans made from 2004 through 2007).

State-regulated mortgage companies such as Irvine-based New Century Financial made just over half of all subprime loans. These companies, which CRA does not cover, controlled more than 60 percent of the market before 2006, when banks jumped in. Another 22 percent came from federally regulated lenders like Countrywide Home Loans and Long Beach Mortgage. These lenders weren't subject to the law, though some were owned by banks that could choose to include them in their CRA reports. Among lenders that were subject to the law, many ignored subprime while others couldn't get enough.

The Register continues to do a terrific job of getting beyond the familiar storylines in explaining what really went down.