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Financial Crisis & Subprime Loans (A Handy Summary) October 1, 2008

Posted by swittersb in Conservatism, Obama, Politics, Republican Stupidity, The Culture, The Left, The Media.
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http://www.audacityofhypocrisy.com/

“The housing bubble caused it.  And what caused the housing bubble?

  The answer is Subprime risky mortgages to low income bad credit risk borrowers.

  And where did these subprime risky mortgages come from?

  It was the Community Reinvestment Act passed by the Democrats and signed into law by President Carter in 1977.  <—(Google it)

It required banks and thrifts to offer credit throughout their entire market area. It gave incentives to help low-income borrowers get a home.

Not a bad idea if done right.

The CRA helped a little, but only a little until 1995, when the Clinton Administration gave new subprime authorization to lenders with massive additional provisions in the CRA. Home loans skyrocketed.”

“Well, in 2003, the Bush Administration proposed a new agency to oversee and regulate Freddie Mac and Fanie Mae, (the government sponsored companies that are the two largest players in the mortgage lending industry) This would have been the most significant regulatory overhaul in the housing finance industry since the S and L crisis a decade ago.  The Democrats stopped it…supporters of Freddie Mac and Fannie Mae said efforts to regulate the lenders tightly under the proposed agency might diminish their ability to finance loans for lower-income families.
   Barney Frank (D-MA)
         “The more people exaggerate these problems, the more pressure there is on these companies (Freddie and Fannie), the less we will see in terms of “affordable housing.”

————–

These companies were forced to loan money to people who couldn’t afford it in the interest of “being fair.” Rules were relaxed and money was loaned and predictably low income families defaulted on loans that they never had any business getting in the first place and now you and I have to pay for it.

 Another liberal policy and another liberal failure. And now we must all pay for it. But hell, they meant well.

http://mpinkeyes.wordpress.com/2008/09/17/barney-frank-and-chuck-schumers-role-the-fannie-mae-failure/

 

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