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Here are the facts surrounding the housing/mortgage/financial meltdown, once again, for Democrats to ignore….
HUD TO FIGHT DISCRIMINATION, BOOST MINORITY HOMEOWNERSHIP AND WORK WITH URBAN LEAGUE TO FURTHER GOALS
August 5, 1997
http://www.thefreelibrary.com/HUD+to+Fight+Discrimination,+Boost+Minority+Homeownership+and+Work...-a019650647
New York Times - 1999
Fannie Mae Eases Credit To Aid Mortgage Lending -
Fannie Mae Eases Credit To Aid Mortgage Lending
President Bush’s and the Administrations Unheeded Warnings About the Systemic Risk Posed by the GSEs – Fannie and Freddie dating back to 2001
Just the Facts: The Administration’s Unheeded Warnings About the Systemic Risk Posed by the GSEs
By Elliot Blair Smith,
USA TODAY
Fannie Mae to pay $400 million fine
Bloomberg - Are you a robot?
Franklin Raines was Director of the Office of Management and Budget under Clinton and returned to Fannie Mae as its CEO in 1999. Raines is not a “chief” economic adviser for President Barack Hussein Obama but has advised the administration on mortgage and housing matters. Obama had hired another former Fannie CEO, Jim Johnson as a member of Obama’s V.P. search committee and who was forced to quit under fire.
Bloomberg News -
How the Democrats Created the Financial Crisis -
Bloomberg - Are you a robot?
Democrats in their own words covering up the Fannie Mae, Freddie Mac
Timeline shows Bush, McCain warning Democrats of Financial Crisis
From the New York Times
New Agency Proposed to Oversee Freddie Mac and Fannie Mae
By STEPHEN LABATON
Published: September 11, 2003 WASHINGTON,
Sept. 10— The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates
Read more: New Agency Proposed to Oversee Freddie Mac and Fannie Mae
From USNews and World Report
Barney Frank's Fannie and Freddie Muddle
By Sam Dealey
September 10, 2008
[…]
So five years ago, there was one of those rare moments in Washington when the branches and personalities of government—in this case, the Bush administration—are less interested in protecting or expanding their turf than in fixing a looming catastrophe. What was Frank's response to the proposal?
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
[…]
http://www.usnews.com/opinion/blogs/sam-dealey/2008/09/10/barney-franks-fannie-and-freddie-muddle
Wall Street Journal Barney’s Rubble – September 17, 2008
Barney's Rubble
Barney Frank in 2005: What Housing Bubble?
Steve Kroft On Credit Default Swaps And Their Central Role In The Unfolding Economic Crisis -
The Bet That Blew Up Wall Street
All this, in addition to the repeal of the Glass-Steagall Act by President William Jefferson Clinton caused the meltdown.
It COULD have been stopped or greatly reduced. Democrats fought that every step of the way and the Republicans wilted under the barrage of being called racist and worse.
I did read it, our government set it up to where just about anyone could get a home mortgage
through creative financing....such as ARMs. It should never have been implemented and it was easy
to see the impending train wreck. Make no mistake, our government set everything in motion for F&F,
and all the other lenders.
I been right here...watching Europe stupidly engage in an austerity reaction to the 2008 Recession...and seeing how slowly they recovered compared to us
2008 recession recovery, SLOWEST IN HISTORY.
It was basically about too much capital going into bogus bonds that paid impossibly optimistic returns, and the capital went there because there was (and had been for at least a decade and still is) a lack of investment opportunities to increase demand for goods. Both Rubio and Cruz attempted to address that in 16 with proposals for a tax cut for labor and not the McConnell tax cuts that were passed for corporations and the top .1% and 1%.The CRA hoax was created less than two weeks after the implosion of Lehman Brothers. It was total bullshit invented from ignorance.
What the credulous tards never knew, and still don't seem to know, is that NONE of the broker-dealers were subject to the CRA. Not one of them.
And the broker-dealers were the majority of the subprime market. The GSE's had been reduced to much smaller players by the end. And that was with the full cooperation of the Bush Administration and the Clinton Administration.
When asked by a dipshit Republican Congressman how much the CRA had to do with the collapse of Lehman, Dick Fuld responded with two words, "De minimis."
And it was also basically about too much debt by consumers both in taking out housing and house equity loans, and revolving credit. Because their pay checks went up multiple times slower than increases in corp profits …. which not coincidentally led to so much capital looking for investment referred to in the preceeding paragraph. And consumers wanted some sugar from the growing economy too.
Then, when capital markets failed, the investors sat on their cash. And consumers stopped spending. Together, those caused the economic precursors to real deflation. Which was the killer in the 1930s.
That's when the Bernank stepped in and essentially forced banks to loan money
So lts hear your unbiased source.[
You need to dig a little deeper than an article from a liberal media source, Lesh.Still with this zombie lie?
https://www.mcclatchydc.com/news/politics-government/article24504598.html
No it was not F&F that caused the banking debacle
I dunno. Sorry. I've got to work for awhile. LOLI'd be interested in knowing where you read thatI read yesterday that 2/3 pretty uniformly across educational levels age the Trump econ is working well for them. I'm not much interested in my own anecdotal experiences, or anyone else's, and I don't really doubt the popularity. My concern is that the Trump spending increases and gop tax cuts just exacerbate structural deficits that go back to 1980, and god help us is Warren is somehow elected … which I see as impossible without Trump actually testing whether he can shoot someone
It was basically about too much capital going into bogus bonds that paid impossibly optimistic returns, and the capital went there because there was (and had been for at least a decade and still is) a lack of investment opportunities to increase demand for goods. Both Rubio and Cruz attempted to address that in 16 with proposals for a tax cut for labor and not the McConnell tax cuts that were passed for corporations and the top .1% and 1%.The CRA hoax was created less than two weeks after the implosion of Lehman Brothers. It was total bullshit invented from ignorance.
What the credulous tards never knew, and still don't seem to know, is that NONE of the broker-dealers were subject to the CRA. Not one of them.
And the broker-dealers were the majority of the subprime market. The GSE's had been reduced to much smaller players by the end. And that was with the full cooperation of the Bush Administration and the Clinton Administration.
When asked by a dipshit Republican Congressman how much the CRA had to do with the collapse of Lehman, Dick Fuld responded with two words, "De minimis."
And it was also basically about too much debt by consumers both in taking out housing and house equity loans, and revolving credit. Because their pay checks went up multiple times slower than increases in corp profits …. which not coincidentally led to so much capital looking for investment referred to in the preceeding paragraph. And consumers wanted some sugar from the growing economy too.
Then, when capital markets failed, the investors sat on their cash. And consumers stopped spending. Together, those caused the economic precursors to real deflation. Which was the killer in the 1930s.
That's when the Bernank stepped in and essentially forced banks to loan money
Dude...they were betting AGAINST the very loans they originated...
They rigged it to fail...not realizing that in "winning" they would bring down the whole house
Bush was out there pushing home ownership.
The Bush administration's plan was to put oversight of Fannie & Freddie under Treasury (White House) rule. That was shut down by Republicans and Democrats.
I am still waiting for one of you stupid Trumpettes to explain how Barney Frank blocked anything.
Bush was trying to reduce the GSE portfolios so that the private sector could get a larger market share. His motives were not pure.Bush was out there pushing home ownership.
The Bush administration's plan was to put oversight of Fannie & Freddie under Treasury (White House) rule. That was shut down by Republicans and Democrats.
I am still waiting for one of you stupid Trumpettes to explain how Barney Frank blocked anything.
As for President George Bush,
For many years the President and his Administration not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as the President’s repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.
2001
April: The Administration’s FY02 budget declares that the size of Fannie Mae and Freddie Mac is “a potential problem,” because “financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity.”
2002
May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)
2003
January: Freddie Mac announces it has to restate financial results for the previous three years. [Obama advisor, Franklin Raines was CEO of Freddie Mac when they lied about earnings to increase bonuses]
February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that “although investors perceive an implicit Federal guarantee of [GSE] obligations,” “the government has provided no explicit legal backing for them.” As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. (“Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO,” OFHEO Report, 2/4/03).
September: Fannie Mae discloses SEC investigation and acknowledges OFHEO’s review found earnings manipulations.
September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact “legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises” and set prudent and appropriate minimum capital adequacy requirements.
October: Fannie Mae discloses $1.2 billion accounting error.
November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any “legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk.” To reduce the potential for systemic instability, the regulator would have “broad authority to set both risk-based and minimum capital standards” and “receivership powers necessary to wind down the affairs of a troubled GSE.” (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03).
2004
February: The President’s FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: “The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator.” (2005 Budget Analytic Perspectives, pg. 83)
February: CEA Chairman Mankiw cautions Congress to “not take [the financial market's] strength for granted.” Again, the call from the Administration was to reduce this risk by “ensuring that the housing GSEs are overseen by an effective regulator.” (N. Gregory Mankiw, Op-Ed, “Keeping Fannie And Freddie’s House In Order,” Financial Times, 2/24/04).
June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying “We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System.” (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04).
2005
April: Treasury Secretary John Snow repeats his call for GSE reform, saying “Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system.” (Secretary John W. Snow, “Testimony Before The U.S. House Financial Services Committee,” 4/13/05).
2007
July: Two Bear Stearns hedge funds invested in mortgage securities collapse.
August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying “first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options.” (President George W. Bush, Press Conference, The White House, 8/9/07).
September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before.
September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.
December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying “These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I’ve called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon.” (President George W. Bush, Discusses Housing, The White House, 12/6/07).
2008
January: Bank of America announces it will buy Countrywide.
January: Citigroup announces mortgage portfolio lost $18.1 billion in value.
February: Assistant Secretary David Nason reiterates the urgency of reforms, says “A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully.” (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08).
March: Bear Stearns announces it will sell itself to JPMorgan Chase.
March: President Bush calls on Congress to take action and “move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages.” (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08).
April: President Bush urges Congress to pass the much needed legislation and “modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes.” (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08).
May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.
· “Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans.” (President George W. Bush, Radio Address, 5/3/08).
· “[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator.” (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08).
· “Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans.” (President George W. Bush, Radio Address, 5/31/08).
June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying “we need to pass legislation to reform Fannie Mae and Freddie Mac.” (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08).
July: Congress heeds the President’s call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.
I am still waiting for one of you stupid Trumpettes to explain how Barney Frank blocked anything.
F & F were only participants in the mortgage crisis.
But hey bring it on & blame Jimmy Carter
F & F were only participants in the mortgage crisis.
But hey bring it on & blame Jimmy Carter
Fannie and Freddie were "only participants"? Fannie and Freddie set the standard for ALL mortgages. Lenders would not make loans if they could not be sold. Even you know that to be true!
As for Jimmy Carter,
Jimmy Carter, Bill Clinton, Janet Reno to blame for mortgage mess
By: John R. Smith
Source: BIZPAC Review
Date: October 24, 2011
Historians know that they can never claim wars start with a clash of armies. They know that the root causes of war start long before. In the same way that the seeds of war germinate well in advance of battle action, so too did the causes of this country’s mortgage meltdown, housing collapse, and credit crisis.
Champions of Big-Brother-Government want you to blame everyone else except government intrusion for the economic plagues that currently assail us. But there’s no getting around the truth. In the 1990s and 2000s, activist leftist groups like ACORN, AFL-CIO, and NEA conspired with liberal politicians to push private financial institutions into creating financial products enabling unqualified individuals to buy homes they couldn’t afford. Now, those same leftists not only deny involvement in the havoc they caused, some are in the streets screaming shrilly that “Wall Street” caused the whole mess.
The root cause of the housing disaster occurred after the federal government gave the green light and bullied lenders onto an 8-lane highway toward making money available to all comers for home mortgages. Here is the true and fascinating story of how that started:
President Jimmy Carter sponsored the well-meaning Community Reinvestment Act (CRA) in 1977. It required banks and savings and loans to offer credit to “underserved populations” so they could obtain credit, including home ownership.
In 1991, the Home Mortgage Disclosure Act required lenders to report rejection rates by race. Lenders were informed that their loans would be examined for evidence of bias. Violators would face fines -- get this -- as high as $500,000. The Democratic Congress in 1992 passed the Federal Housing Enterprise Act, providing HUD the hammer to carry out Congressional intent to “meet the mortgage credit needs of all potential home buyers, including those with low and moderate incomes.”
The 1992 act was the fuse that lit the largest housing blow-up the U.S. has ever seen, because one provision required that mortgage giants Fannie and Freddie “should accept down payments of 5 percent or less, ignore impaired credit if the blot was over one year old, and otherwise loosen (their) lending guidelines.”
The Federal Reserve had a hand in creating the problem: “An influential 1992 report from the Boston Fed recommended: ‘Policies regarding applicants with no credit history or problem credit history should not be seen as a negative factor’”. Food stamps and welfare checks were allowed to be counted as “income” on loan applications. Racial quotas and penalties were imposed on lenders with unfavorable “CRA ratings”. “Banks that failed to make enough of these loans were often held hostage by activists when they sought some regulatory approval.”
Next, President Bill Clinton re-wrote the CRA Act in 1994, using his HUD Secretary Henry Cisneros to “put it on steroids”, and juice it into overdrive. It “required the banks to lend to people who were poor credit risks, in the name of ‘housing rights.’” This precipitated a huge surge in mortgage lending to unqualified buyers because Fannie Mae was under unrelenting pressure from Clinton’s Administration “to expand mortgage loans among low and moderate income people.” The CRA was a club “used to force banks to subsidize poor communities with close to $1 trillion in high-risk loans…”
If she didn’t like the reports on who was getting loans and who wasn’t, then Attorney General Janet Reno bullied the banks with quotas and faulty statistics to literally extort millions of dollars from banks by alleging racial discrimination if they didn’t play along. This intimidated many banks to agree to pay cash settlements so they could avoid trials and negative publicity.
It turned into a free-for-all of banks approving loans for people who clearly couldn’t afford to repay them. By 1996, 42 percent of Fannie and Freddie’s mortgage financing went to borrowers with below-median income. This target increased in 2000 to 50 percent, and was 52 percent by 2005.
This series of political events, this flood of risky loans that were distributed around the globe by Congressional creatures Fannie and Freddie, was the root cause that inflated the credit bubble to the bursting point and brought our financial system near the brink of destruction.
Jimmy Carter, Bill Clinton, Janet Reno to blame for mortgage mess
http://www.bizpacreview.com/index.c...p;ArticleId=50346&returnTo=john-r-smith-1
The deliberate manufacturing of toxic securities and then betting against them didn't start until 2007.
Yes, I am more than familiar with how CDS blew up Wall Street. I have posted about them dozens of times on this forum. In depth. In fact, I have posted many, many times that one of the first things regulators should have done after the crash was require that all CDS have an insurable interest requirement. Amazingly, this has yet to be done to this day.The deliberate manufacturing of toxic securities and then betting against them didn't start until 2007.
I see you refused to read the information I provided to you. Here you are, more of the article from a far-left news source no less!
The Bet That Blew Up Wall Street
Steve Kroft On Credit Default Swaps And Their Central Role In The Unfolding Economic Crisis
2008 Oct 26
This story was first published on Oct. 26, 2008. It was updated on Aug. 27, 2009.
Anyone with more than a casual interest in why their 401(k) has tanked over the past year knows that it's because of the global credit crisis. It was triggered by the collapse of the housing market in the United States and magnified worldwide by the sale of complicated investments that Warren Buffett once labeled financial weapons of mass destruction.
They are called credit derivatives or credit default swaps.
As correspondent Steve Kroft first reported last fall, they are essentially side bets on the performance of the U.S. mortgage markets and some of the biggest financial institutions in the world - a form of legalized gambling that allows you to wager on financial outcomes without ever having to actually buy the stocks and bonds and mortgages.
It would have been illegal during most of the 20th century under the gaming laws, but in 2000, Congress gave Wall Street an exemption and it has turned out to be a very bad idea.
The Bet That Blew Up Wall Street
