Heard Glenn Beck read this yesterday and see it here as well. Focuses like a laser beem on the Left and Clinton catering to the Leftist belief in Everyone Has a Right to a Home:
“Sometimes the greatest blame comes from great praise when viewed in hindsight. The Los Angeles Times proves that with an article from 1999 heaping praise on the very people most responsible for the credit-market meltdown. Ronald Brownstein lauded the Clinton administration for boosting minority ownership by forcing lenders to offer better terms to marginally-qualified borrowers — and noted the financial creativity from Fannie Mae and Freddie Mac as a crucial component of Bill Clinton’s efforts. It also demonstrates why Congress mandated the failure of the lending system…’
Thanks to this massive intervention in the lending marketplace, what followed was utterly predictable for anyone who had ever completed Econ 101 at a junior college:
- The massive influx of new home buyers drove up housing prices.
- The rising prices pushed borrowers and lenders into adjustable-rate mortgages to allow the purchase of homes for no down, on the premise that the rising prices (which reacted to massive new demand) would allow them to refinance before the ARMs adjusted to their maximum, at which point borrowers would refinance with the new-found equity as their down payment to get better rates and lower monthly payments they could afford.
- Housing prices rose so quickly that builders invested in new houses on a massive scale to produce inventory to meet the demand.
- As long as prices continued to rise, and as long as the two GSEs kept issuing the MBSs, investors kept buying them — with their government backing.
All of this depended on a steady and significant increase in housing prices — which came to an end late last year.
http://hotair.com/archives/2008/09/25/a-great-example-of-how-we-got-to-the-credit-market-meltdown/
Motive and Opportunity. Fingerprints and Confessions. Eye Witnesses and the Government’s DNA all over this. Book ‘em Dano!
