From my perspective, the CRE bubble is highly significant; it gives the lie both to those who blame Fannie/Freddie/Community Reinvestment for the housing bubble, and those who blame predatory lending. This was a broad-based bubble.This doesn't mean that predatory lending didn't exist. It simply means that predatory lending was a result of the housing bubble, not a cause of it.
Saturday, January 09, 2010
Did predatory lending cause the housing bubble?
Or, for that matter, did the Community Reinvestment Act? Paul Krugman compares housing prices to commercial real estate prices and draws a conclusion I agree with: