Letter To Representative Peters

I wrote the following letter to my Representative today.

Representative Peters,

I doubt that you will respond to my message as it poses a common sense solution which seems missing in Washington. Before you can "fix" the problem, you must get to the root cause. The root cause is the Community Reinvestment Act. This act forced the banks to provide loans to those people who could not afford them. Several administrations then forced the regulators to "grade" the banks on how well they were meeting the requirements of this bill. If they did not provide enough loans, they were downgraded. So the banks found themselves with billions of dollars of loans they knew were going to fail. Creativity then created the "alt a" and sub prime loans packages that were sold all over the world. (By the way, the FHA still sells the same type of loan.) That Dear Representative is the cause.

As I see it there are several culprits to this problem. They are:

1. Congress who passed the law

2. The Administrations who demanded the law be followed

3. Fannie and Freddie who bought the loans (and were praised on doing such a good job)

4 The Regulators who did not point out the problem

5. The Rating agencies who went along with the fraud

6. And the banks who recklessly sold garbage.

There is plenty of blame to go around but as I see it, your heralded "reform" bill only addresses the last one.

As long as this bill is still on the books and any reform will be meaningless without its removal. So, lets get off our political posturing stand and work to invalidate this law and then we can all work to see how reform can try to prevent it.

Tom Vorenberg

30100 Telegraph Road, Suite 478

Bingham Farms, MI 48025

What do you think?