EHHHHH (buzzer sound)...wrong answer.
Now we're hearing, from self-righteous SOB's like Senator Chris Dodd (D-CO), that the housing crisis was preventable and occurred under President George Bush's watch.
EHHHHH (buzzer sound)...wrong answer
Syndicated Cal Thomas, in his article in today's online Townhall.com, states, "It was pressure from the Carter and Clinton administrations that forced Fannie and Freddie to grant more high-risk loans to people who otherwise would never qualify."
Furthermore, Thomas adds:
"Democrats would love to blame the Bush administration for a disaster they mostly helped to create. But, according to the White House, as early as April 2001, the administration warned that the size of Fannie Mae and Freddie Mac was 'a potential problem," because 'financial trouble of a large (government-sponsored enterprise) could cause strong repercussions in financial markets, affecting federally insured entities and economic activity.' As recently as June of this year, President Bush asked Congress to take the necessary measures to address growing foreclosures. 'We need to pass legislation to reform Fannie Mae and Freddie Mac,' he said. In July, Congress passed reform legislation, but it was too late."Further compounding the problem is Democratic presidential candidate Barry Soetoro/Dunham/Obama and his colleagues in the United States' role in helping create the subprime mess. It was Obama's role as a lawyer within the "left-of-center" Public Research Interest Group, which ultimately forced banks to provide loans to minorities under the threat of racism.
Ultimately, it was Obama and a Democratic Congress that created laws and regulations, which planted the seeds of the subprime housing industry. Columnist Jerry Bowyer states:
"Obama spent his pre-elected career working right in the middle of the complex of law firms and activist groups which use law and regulations to push banks into vastly increasing their lending to Subprime borrowers right in the middle of the golden age of the expansion of the Subprime industry. "Finally, there was the role of community organizations and civil rights law firms that, according to columnist Bowyer, threatened to cry "racism" if banks did not lend to minorities:
"(T)here simply was no such thing as a developed Subprime mortgage industry until the US congress created it by ordering banks to issue loans to people who were not credit worthy. Community activist groups (such as the Public Interest Research Group and Acorn) and civil rights law firms (such as Miner, Barnhill & Galland) had make their living by accusing banks of racism when the banks hesitated to approve loan requests from minority citizens with poor credit scores.These "champions of minority rights" worked diligently to pass the Community Reinvestment Act, a law which forces banks to provide home loans to minority neighborhoods, regardless of their credit history, risk factor, neighborhood location, crime, etc. Bowyer states the following:
"The Community Reinvestment Act was created as a result. Initially the act was used, not to get banks to lend to minority households, but to get them to cut checks to ‘community groups’. Left of center activist agencies, which had pushed for the act in the first place, used it as a shakedown tool. So long as the banks kept paying off to the activists, the activists would hold off on sending complaints to the bank regulators’ CRA files.
Eventually, under Clinton, the CRA was renewed and, not surprisingly, made more punitive. Banks were required to make Subprime mortgage loans now too, or else suffer a low CRA rating and be punished accordingly. The Fed played it’s part. The Home Mortgage Disclosure rules created an unfunded mandate for banks to track and publicly disclose the race and gender of it’s mortgage clients. Now the shakedown artists had an easy source of complaints and a club with which to beat the banks into submission. The bankers complied and the Subprime mortgagage market was born."
And now guess who gets to suffer? The taxpayers, as a mis-guided Bush Administration, and a completely "off-it's-rocker" Democratically-controlled Congress are looking to pass a $700 billion bailout bill that rewards Wall Street, banks, and CEO's for bad behavior, while eliminating culpability from Leftist community groups and elected officials, which essentially lobbied for regulations that created the subprime mess.