The banks THEMSELVES started loaning money to anybody with a pulse, the Housing Act didnt make them...?... do it and neither did Barney Frank. It happened because the REPUBLICAN WRITTEN Glass Steagel cancellation bill and BUSHS repeal of loan bundling laws let them. They did for one simple reason, because they could. Why do I still see this fantasy version of recent history being floated here and on right wing TV? |
The Community Reinvestment Act encouraged lenders to loan to the unqualified under the threat of law suits, boycotts or actions by community organizations such as ACORN. And Congress made it easy for the banks to dump the loans (made under the CRA) by mandating that the GSE's (Fannie and Freddie) purchase 70% of all the loans made under the act.
And Barney Frank obstructed any review of the GSE's (as was a desire of President Bush) by saying that nothing was wrong while Shirley Lee Jackson called such a review racist (to be expected by a one trick pony like Lee Jackson). And Barney Frank defending them created a conflict of interest since he was having a relationship with Herb Moses, who was an executive at Fannie Mae (Frank referred to Moses as his "lover."). The biggest losses were experienced by the GSE's, which were forced to buy those loans.
No financial institution is going to lead money to the unqualified unless the government mandates it and provides a mechanism for getting rid of the toxic loans. What Congress did was create a program that privatized profit and socialized risk.
Fannie May and Freddie Mac bought more sub prime mortgages than anyone. They are government sponsored entities. Government created the housing bubble not so much the banks. The Federal Reserve kept rates artificially low and the GSE's Fannie and Freddy securitized many of the loans. Many banks did make bad loans and they should have failed. The ones who did the right thing would have been rewarded.
The banks should have been forced to live with the consequences of their own poor lending decisions and fraudulent credit and investment ratings.
Hey Bob Rat, how long are you gonna blame Bush for all the troubles of our 'used to be' great country? When will you see the light that it was those wonderful progressive, liberal, live and let live ideas, don't work?
You are 100% correct. They did it because they could, and did they ever make a bundle!
Dont blame Clinton? Why not? I guess you hate facts. He DID NOT HAVE TO SIGN THEM!!! Stop being a sheep
