Who's to blame for the mortgage boom to bust and resulting financial meltdown?

vanity | 9/17./2008 | Jim Robinson

[ari-freedom]

he has to do both. he can’t sound like a cold CEO that just rattles off points

[proud2beconservativeinNJ]

In honor of your post - please move me to the dollar a day donor. You’re the best.

[Arec Barrwin]

Greenspan, hands down, was the proximate cause. The Greenspan Fed spurred the housing boom via lower interest rates as a recession antidote to 9/11 and the Internet bubble. And it worked.

But he kept rates artificially low for 2 years longer than he should have. And there you go. That’s it.

[Melinda]

And what about the new owner of Merrill Lynch, the venerable Bank of America? Choke. Are they still pushing credit onto illegals? Or have the lawbreakers run home and leave ‘em hanging?

[ari-freedom]

I guess he won’t be VP anytime soon

[Para-Ord.45]

-The Gramm-Leach-Bliley Act signed into law by Bill Clinton November 12, 1999.

-The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act.

But the seed was planted in the ’90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.
And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in America.

IBD

- Alan Greenspan was nicknamed “ Mr.bubble “ even by the radical left-wing NY Times. His `87 S&L crash,stock bubble and now the mortgage bubble.

Amazingly in a 2004 speech he suggested that MORE borrowers would benefit from adjustable-rate mortgages!!! Greenspan`s positive comments about adjustable rate loans and subprime lending gave the green light to speculators who respected the Chairman’s opinion.
And then his Fed did not lift a finger to insist for stiffer rules for underwriting mortgages to people who ultimately couldn’t afford them.

“We’re not about to go into a situation where (real estate) prices will go down. There is no evidence home prices are going to collapse.” Alan Greenspan, May 21, 2006

[Petronski]

Don’t forget Robert Rubin.

But I want to. I really want to!

[CarryingOn]

The financial institutions, big and small, have been willfully “complying” with Federal orders to provide “affordable” housing to anyone able to walk in the door since the Clinton reign. Like FDR, the Clintons brought in the young socialist to establish their New Deal. The financial institutions, like the persistent dung-beetle, have been rolling this ball of crap along year after year as it grows to immovable proportions. Collapse was inevitable because it was all built on a lie. The Federal Government's manipulation of the credit markets is 100% liable for the “credit crisis.” FDR's socialist experiments prolonged the “Depression” for years, and we are still struggling with its aftermath. It doesn't take a highschool graduate to understand that a bad loan when its made will fail. Of course, Democrats are notorious for partying now and leaving the cleanup to future generations.

[awake-n-angry]

“The few honest mortgage brokers out there have been persecuted, and even prosecuted for NOT making bad loans to unworthy clients.”
____________

I’d like to see a citation for this as I have never heard of a banker being prosecuted for not making a loan.

My criticism of the post is that this takes all the repsonsibility away from banks and mortgage brokers who were making bad business decisions.

I can’t help but think of that scene from Animal House where Bluto (Belushi) tells Otter, “You f&#$ed-up kid. You trusted us.”

Little is being said about responsible banks that used good judgements and made only supportable loans. Those guys are getting screwed as the bankers with bad judgement are getting bailed out.

[Reagan Man]

Clinton's head of OMB, Franklin Raines, got $90 million between 1999 and 2004, as head of Fannie Mae. Another Clintonite, Jamie Gorlick, received $24 million over four years. James Johnson received millions of dollars as head of Fannie Mae in the 1990`s. All three are major Democratic Party operatives.

The US is going through a major credit crunch that will effect many aspects of the US economy. And the Demlibs deserve a significant portion of the blame for this occuring. Nancy Pelosi and Harry Reid are at the center of this debacle. They've run Congress into the ground over the last two years.

The liberal establishment wanted cheap mortgage loans for everyone, even if folks couldn't afford them. Some Pubbies wnet along for the ride. And now the American taxpayer is having to pick up the tab with the Feds bailing out major business institutions.

A wise conservative once said:

"Government is not the answer to our problems. Government is the problem".

[sergeantdave]

This is easy -

The problem with government can be traced back to government.

Or to say it more succinctly - nanny-state, fascist government sucks.

[Responsibility2nd]

You and me agree. See my post #18.

Alan Greenspan is the culprit behind the mortgage mess.

And click the link in post # 18 to see more on the FNMA/FHMLC screw-up that is costing US taxpayers plenty.

And who benefited from this?

B. Hussein Obama.

[editor-surveyor]

" There is no evidence home prices are going to collapse." Alan Greenspan, May 21, 2006

But that was before the Democrat takeover of congress, and subsequent rumbling about tax increases, which caused small business owners to reduce staff, resulting in significant increases in unemployment, and mortgage defaults, which resulted in bank failures.

[stockpirate]

Well put Jim, but you left out IMHO that now the Government has taken control of the largest insurance company in the US if not the world AIG and two morgage company’s.

So we taxpayers are in the insurance and loan shark business.

Now the Socialists will really be able to steal some serious taxpayer money.

[Jim Robinson]

It all boils down to socialism. Roosevelt’s New Deal plunged the government into a socialist morass from which we may never recover. And even as risky socialist federal mortgage insurance schemes crumble around our ears, and the risky socialist federal ponzi scheme called social security threatens to bankrupt the nation, Democrats and even some RINOs are pushing for yet another risky socialist federal boondoggle called universal federal healthcare insurance. Creeping, no rampant socialism will be the death of America.

[reaganaut1]

The idea that *only* Democrats have been pushing for sub-prime mortgages is WRONG. Please see the thread http://www.freerepublic.com/focus/f-news/2084267/posts .

Look at this, for example http://www.hud.gov/news/release.cfm?content=pr04-006.cfm&CFID=11239796&CFTOKEN=90023221

HUD No. 04-006
Lemar Wooley
January 19, 2004

BUSH ADMINISTRATION ANNOUNCES NEW HUD “ZERO DOWN PAYMENT” MORTGAGE
Initiative Aimed at Removing Major Barrier to Homeownership
LAS VEGAS - As part of President Bush’s ongoing effort to help American families achieve the dream of homeownership, Federal Housing Commissioner John C. Weicher today announced that HUD is proposing to offer a “zero down payment” mortgage, the most significant initiative by the Federal Housing Administration in over a decade. This action would help remove the greatest barrier facing first-time homebuyers - the lack of funds for a down payment on a mortgage.

Speaking at the National Association of Home Builders’ annual convention, Commissioner Weicher indicated that the proposal, part of HUD’s Fiscal Year 2005 budget request, would eliminate the statutory requirement of a minimum three percent down payment for FHA-insured single-family mortgages for first-time homebuyers.

“Offering FHA mortgages with no down payment will unlock the door to homeownership for hundreds of thousands of American families, particularly minorities,” said HUD’s Acting Secretary Alphonso Jackson. “President Bush has pledged to create 5.5 million new minority homeowners this decade, and this historic initiative will help meet this goal.”

Preliminary projections indicate that the new FHA mortgage product would generate about 150,000 homebuyers in the first year alone.

“This initiative would not only address a major hurdle to homeownership and allow many renters to afford their own home, it would help these families build wealth and become true stakeholders in their communities,” said Commissioner Weicher. “In addition, it would help spur the production of new housing in this country.”

[editor-surveyor]

Keep your blinders on, reality is tough.

There have been numerous news pieces about lenders getting hit with fines for “red lining.”

[Mark was here]

I blame everyone who over bought a house thinking it did not mater how high the asking price, because the house came with a free ATM machine.

[DmBarch]

Sure , those leftists are mainly to blame. But there was a news report recently, that said that less than 30% of the sub-prime mortgages in the last few years were to the lower income people. Some of it was investors trying to flip condos and houses in high cost areas, while other times it was somebody going for the 800k McMansion when they should have spent 500k max. But once the sub-prime programs were set up in the banking system, they got pushed to buyers of all incomes.

[Jim Robinson]

"So we taxpayers are in the insurance and loan shark business."

We've been the guarantors for decades. Now we are absentee, uncompensated and penalized owners. Welcome to the socialist takeover of America.