Posted on 08/27/2010 7:06:17 AM PDT by cycle of discernment
"Brad" commnets:
Below is a brief history of why the housing bubble burst.
» 1977: Democrat Jimmy Carter signs the Community Reinvestment Act, guaranteeing home loans to low-income families.
» 1999: Democrat Bill Clinton puts the CRA on steroids by pushing Fannie Mae and Freddie Mac to increase the number of subprime loans.
» September 1999: The New York Times publishes an article headlined "Fannie Mae Eases Credit to Aid Mortgage Lending," which warned of the coming crisis due to lax lending policies of the Clinton administration.
» 2003: The White House calls Fannie and Freddie a "systemic risk" and the Republican Bush administration pushes Congress to enact new regulations.
» 2003: Rep. Barney Frank, D-Mass., says Fannie and Freddie are "not in a crisis," bashes Republicans for crying wolf and calls F&F "financially sound." Democrats block Republican-sponsored regulation legislation.
» 2005: Federal Reserve Chairman Alan Greenspan voices warning over F&F accounting, saying, "We are placing the total financial system of the future at a substantial risk."
» 2005: Sen. Charles Schumer, D-N.Y., says he thinks F&F "over the years have done an incredibly good job and are an intrinsic part of making America the best-housed people in the world."
» 2006: Sen. John McCain, R-Ariz., again calls for reform of the regulatory structure that governs F&F.
» 2006: Democrats again block reform legislation.
» 2008: The housing market collapses; Democrats blame the Republicans.
(Excerpt) Read more at washingtonpost.com ...
I agree that the lending standards described in this article were outrageously irresponsible, but I also believe that they played a very small role in the collapse of the U.S. housing market.
The real problem was the whole process under which all kinds of homeowners -- even responsible ones with great credit records -- were able to buy homes using heavily leveraged financing at record low interest rates. The "natural" economic consequence for this kind of arrangement was a combination of two trends that could never be sustained over time: (1) rising home prices (since home prices are largely driven by the monthly cost of ownership, not the actual price of the home); and (2) a long-term decline in revenue for lenders from mortgages even as their interest-rate risk increased dramatically (i.e., they were holding long-term loans at very low interest rates that are likely to increase in the future).
For all the complaints about bank lending standards over the last couple of years, it's important to remember that the U.S. legal and regulatory landscape for residential mortgages is very one-sided in favor of the borrower. Just think about it. You can go out and get a 30-year fixed-rate mortgage -- and refinance it whenever you want to if prevailing interest rates go DOWN, but the bank never has the option of renegotiating the terms of the loan if rates go UP.
Because the left is the MSM. We are only making headway against the left because we have a little bit of new media to combat their propaganda. Conservatives may shout this from the rooftops all they want, but most people will not hear it because it is spiked by the MSM.
To 9 - Correct you are! Which is why this hasn’t been shouted from the Capitol rooftop.
“I sometimes don’t think the Republicans are really on our side.”
The Ruling Class only has one side; their own.
I think that’s exactly right.
He left out Ruben and Clinton set the collapse in motion by letting banks have gambling rights by instituting creation and trading of CDO’s and CDS’s in 1997. Also the 80/20 and other variations of 0 down mortgages that skirted PMI.
Because they allowed it. The shouting part should have occured long ago. Americans are fed up with good reason. While not promoting the socialist movement in our country, Republicans have, with few exceptions, aided and abetted it the last 60+ years.
GOP = enablers.
During the collapse I read a similar time line which also mentioned a lawsuit filed (I think in Chicago) by ACORN, which forced banks to make such loans.
Does anyone have a link that has more detail on this?
You are being unfair.
Under the Bush administration, the GOP tried to stem this 3x...the dems blocked it everytime ( because it was a vote-getter for them) and the dems always successfully painted the GOP as “mean” for wanting to put back in safeguarding regulations—that is, aligning lending practices with proper standards to protect the system that had been in place since post WWII.
They also had a hand in it by remaining silent until the collapse.
And Bush sure didn’t do much to oppose it either.
Because they turn to jelly when anyone plays the race card and the mortgages for dead beats and illegal aliens was a pet project of the Black and Hispanic caucuses in COngress.
Obama and Biden do their “last eight years of Bush” BS and we never hear a Republican state the obvious. It wasn't the eight years of Bush, it was the last four years of Democrat control of the House and Senate. Adding Obama to that mix just multiplied the misery.
Until the Rats took over in 2007, we had record month to month job growth, record Federal Tax Revenue to the Treasury, 4.5% GDP growth and an Unemployment Rate of 5%.
As soon as Nancy and Harry took over, every one of those positive signs started to head the other direction. Coincidence (?), I think not.
But didn’t the low interest rates contribute to a robust market? With high interest rates, there would have been a much slower housing market. Wouldn’t this have led to other negative economic consequences?
ping....
“And Bush sure didn’t do much to oppose it either.”
From the article:
» 2003: The White House calls Fannie and Freddie a “systemic risk” and the Republican Bush administration pushes Congress to enact new regulations.
» 2003: Rep. Barney Frank, D-Mass., says Fannie and Freddie are “not in a crisis,” bashes Republicans for crying wolf and calls F&F “financially sound.” Democrats block Republican-sponsored regulation legislation.
The GOP certainly could use this to campaign with now.
Because, all this while, the Republicans controlled Congress.
The Democrats were able to block reform only so long as several Republican Senators and Congressmen went along with them.
And, if the cries for reform were so strong, why didn't the GOP majority ever make Fannie and Freddie the major issue they should've been?
Fact is, the GOP majority didn't have the courage to follow-through on their efforts at reform. The time for them to be "screaming from the rooftops" was in 2005. Not now.
Through their inaction, the Republicans were almost as complicit in the meltdown as Democrats.
The RNC plays the role of the team that travels with and plays against the Harlem Globetrotters in exhibitions. They have well-choreographed moves that put on a show BUT are not designed to actually win the game.
It is absolutely inexcuseable that Barney Frank is still the Congressional point person for Banking.
Don’t forget about Jamie “The Wall” Gorelick”. She collected a tidy sum while we lost.
There were threats of lawsuits against banks who practiced ‘redlining’
Redlining was when you were rejected for a loan application because YOU COULD NOT AFFORD IT
But they threatened lawsuits if you ‘redlined’ a minority6
And the banks caved under massive government pressure
The onese who are NOT shouting this from the rooftops are currently happy because Obammy bailed them out...
So...
You got to give bad loans...and you made congress-critters and politicians very happy.
They got votes, You got bailed out, so you didnt have to worry about these bad loans.
Everyone is happy except the taxpayers- but the democraps told them it was the Eeeeeeeevil Republicans and George Bush who did it.
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