Bill Clinton created the subprime disaster which he now blames on Bush.
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
Published: September 30, 1999In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates — anywhere from three to four percentage points higher than conventional loans.
Fannie Mae Eases Credit To Aid Mortgage Lending – New York Times
h/t to Dave G
When Bill Clinton raised his finger last night and said “Listen to me now” it just like when Bill lied in 1999 when saying “and I want you to listen to me [with finger pointed at us just like in last night’s speech], I did not have sex with that woman, Monica Lewinsky…”
Obama was a central figure in Illinois in threatening state punishment if private banks refused to loan money on a “no income verification” basis. The idea that this was caused ONLY by Republicans is only acceptable to adult idiots and children. At one point 100% of the mortgage loans for properties East of Western avenue in Chicago, were “no income verification” loans, as banks only competetive option was to offer this type of loan or close their doors. A prominent real estate agency owner spent 2 hours educating me on the inside horrors of all the insanity that was occurring and I’m sure my face looked like this when I learned the facts.
http://omoftheday.files.wordpress.com/2012/03/shock.jpg
I took all my money out of the market over the following few weeks and watched it all collapse from the sidelines. That’s why I smile alot. 🙂
The truth is not so simple. Clinton definitely contributed, but Bush did too, and in reality the causes of the crash go back decades. A critical decision by the Clinton administration (and the Republican led congress) was the repeal of Glass-Steagal.
That being said, Clinton hit a home run last night. One of the best speeches he ever gave. If Obama gives a good speech tonight its going to give them a good boost in the polls.
And then the jobs report comes out and everyone remembers that it has been four years of the same bullshit.
New Mexico would vote for Obama even if the entire state was unemployed.
I didn’t say I was voting for Obama, in fact I’m voting for Romney, even though my vote won’t count because of the electoral college system.
An election computer model out of Colorado indeed places New Mexico as Obamamatic but the overall US map spells landslide:
http://dailycaller.com/2012/08/23/university-of-colorado-prediction-model-points-to-big-romney-win
I’d be surprised if he took his own state.
Clinton hit a home run last night ? Only with idiots who have no memory . That corrupt liars days of fooling anyone with a sound brain are over .
Don’t be such a partisan hack. The guy gave a great speech. Even the WSJ is admitting it.
Charisma and lies have nothing to do with substance . Hitler gave great speeches . And as far as partisan goes , you are wrong there too . I will write in Ron Paul . No more of this lesser of two evils . Ron Paul is the man who really would turn America back into a nation to be proud of .
Bush actually went in front of congress many times, trying to get the Dems to reign in the housing market, only to be called a racist.
Really?
“Homeownership: The president’s program aims to help people with low incomes, particularly Latinos and African Americans.”
http://articles.latimes.com/2002/jun/16/nation/na-bush16
“Top Bush strategist Karl Rove still blames Frank for its failure, saying Frank and other Democrats portrayed a vote to regulate Fannie and Freddie as “anti-black, anti-brown, anti-poor, anti-homeowner’’ because of the enterprises’ affordable housing mission. “They were brutal,’’ Rove said in a recent interview. “And so Republicans shied away from confronting it.’’
“For many years the President and his Administration have 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.”
SEVENTEEN TIMES IN 2008 ALONE.
Gator, Isn’t my memory correct that the Republicans controlled Congress six of the eight years of the Bush term (I assume you are talking about Bush 43). It was them as well as the dems that failed to rein in the housing industry.
It wasn’t just Dumbocrats standing in the way of reform, it was banker (and money market managers primarily) who didn’t want any rain on the parade, since so many funds that people were making money off of were invested into the sub prime market.
True, Dumbocrats were the ones who could have stopped it but didn’t.
Hey Brian! Bankers are ‘risk adverse’. They do not like gambling, not even with other people’s money, it’s bad for business. Congress put a legislative gun to the heads of banks and threatened to pull the trigger if they did not start loaning money to unqualified borrowers. Bankers had no choice but to cobble together rotten products that were doomed to failure. The only thing the banks did wrong was try and profit off this garbage instead of protesting bad laws.
Hey Andy! It only takes a handful of ‘racers’ to shut down society. The democrats know this and use it when they are in the minority. I don’t want to spam Steven’s site with all the citations, but they can be found here…
http://nicedeb.wordpress.com/2008/09/21/the-white-house-warned-congress-about-fannie-mae-freddie-mac-17-times-in-2008-alone/
Simple economics at work here too, jacking up the price of low-end properties when the mortgages to buy them became available, only to crash back down again in value when ballooning payment mortgages were no longer available.
Leaving banks holding the bag on a lot of junk with a mortgages higher than the possible property value
The banks profited big time and the fault of inflation and the overpricing of home values lies on the federal reserve ( it ain’t federal and there is no reserve ) . The leadership of both major parties is in the bag for the fed and the banks , until this is changed there is no way this nation can get out of debt . If and when austerity measures come , who do you think will suffer ? Use your brain and think before you answer .
Wrong again John. The banks have suffered as a result. A few cronies, mainly democrats, did get rich. But banks lost alot of freedoms they previously enjoyed and credit ratings as well. They have had to dance for Big Brother and have lost huge portions of profits through new legislation.
But then you are ready to take us over the falls because your guy lost.
Exactly. That was how I knew that politics were involved at base – there have to be rent-seekers of some sort in the background when people of substance act as if they had lost their economic common sense. So often politicians set up the playing field, and then manage to escape censure when the game goes bad…
And unlike the caricatures of all-powerful business-men, many business people are pretty timid when it comes to facing down government lawyers and the like. It’s understandable; they aren’t cut out to be heros, they just want to succeed as best they can.
And I’m not talking about the Wall Street Honchos and the Subprime Kings – they came later to the party after it was going full-swing. (Interestingly, the same types showed up during the S & L disaster, once that got going. In fact, these things seem to follow a fairly set pattern …)
rw just highlighted my typo… “risk averse’… that’s better.
TY!
Hey gator , when you speak of banks struggling you are speaking of the smaller ones . Very few of the big banks or financial institutions have lost except when they have been had by one or more of their own . As for going over the falls that journey began in 1913 with the establishment of the federal reserve ( it ain’t federal and there is no reserve ) . Intelligent men have been warning about this for forty or fifty years and the chickens are coming home to roost . Are you aware that there were seminars given in the early eighties that laid out precisely what is now happening . Their only mistake was in timing as they felt then that it would happen much sooner . I recall that at the time all these men were much malighned for their stance and predictions . All of this is leading to the big push for a one world government . Do you still think that is a wild conspiracy theory ? If so you have your head somewhere besides where the sun is shining . Forgive the bluntness as I have no animosity for you but after over sixty years of life I am no longer willing to agree to slavery . And yes I do think that if you vote for either of the two main parties you are agreeing to slavery . They both want more power to achieve their agenda and their agendas are not beneficial to a sovereign strong USA .
I am a believer in choosing the lesser of evils, and not going over the falls. Maybe you don’t care, but many of us do, and do not appreciate boat wreckers.
The biggest three American banks all lost market share and profits. “The Banks” are made up of people, and those people suffered greatly under this mess. You obviously do not know anyone who works for a bank, because they can tell you about the pay cuts, lost benefits, entire departments fired, etc…
You are confusing cronies with banks. You are also throwing the baby out with the bath water, cutting your nose to spite your face, etc… It should be obvious that we hold this idea as true, that one does not throw everything to the wind over a lofty principal.
Gator 69 , I have got to remind you that this country was founded on lofty princepals . If you sacrifice virtue in order to achieve some end then what do you gain ?
John, I am an enormous fan of the men who founded this country and would like nothing more than a strict constitutionalist as POTUS. But my head is not in the clouds, I am a pragmatists and will go for what benmefits me most rather than be a martyr.
You are sounding like a business hating lefty right now. I blame the politicians who enable bad business for personal gain, just as I fault the drunk driver, and not the car.
“Wells Fargo & Co. (WFC) has agreed to pay $85 million to settle civil charges that it falsified loan documents and pushed borrowers toward subprime mortgages with higher interest rates during the housing boom.”
“Bank of America Corp will fork over a whopping $335 million to settle claims that it discriminated against minorities through a subprime lending scheme.”
This was not good for anyone but some Obama voters and cronies.
Gator , on the one hand you say the banks lost big time and on the other you say that they brought it on theirselves . I believe the banking system is out of control and that the banks are given the ability through legislation to over reach and also to over charge . I beleive this due to the record , the history of finance of the last one hundred years but especially of the last thirty . Through the manipulation of banks and the financial houses that run the market the taxpayer and the small invester has been legally and immoraly robbed . The market is set for a big fall and it will happen if the giants in the market can see a way to profit from it . And yes Gator , I have friends that have made money and friends that have lost money but overall they are not in control of the situation in any way other than choosing where to put their money . Do you ever consider the value of the dollar as compared to thirty years ago ? And what about the lost industry as the manufacturing is moved overseas due to the creation of more favorable conditions overeas ?
It’s not the banks, McGuire, it’s the speculators and money managers who cause the problem. For example, they took these sub-prime mortgages in bundles and put them into every fund they could think of, they didn’t want the funds to stop making money.
Manufacturing in this country, to me, left the building because of the environmental regulation. Nobody can deal with threats to essentially shut them down over CO2 emissions.
Need a weak dollar? Give Zero another four years. The worst case scenario I can think of is, EPA closing petroleum refining in the US, then US is no longer the world’s largest petroleum importer, then crude oil no longer valued in US dollars, then Value of Dollar = Zero, same as he’s worth
I’m not joking either
Dont leave Alan Greenspam out of the mix for the housing debacle.
Read “The Big Short” by Michael Lewis. Great book on this subject. Some American banks had their balance sheets damaged so badly by the sub prime mess that they were taken over by Canadian banks (Harris for example). It was a dumb idea, the Dem’s started it, the Rep’s didn’t fix it and they take the blame because the house of cards crumbled when they were still in power. It added a trillion to the national debt to bail out of it and the currency will be permanently devalued due to the printing presses working overtime to print money to fix it.
Someone mentioned earlier that the Republicans had the house and senate for 6 of the 8 Bush years. Which is true on its’ face, but does not tell the entire story. The Republicans had a simple majority not a super majority. Without a super majority, people like Barney Frank and Chris Dodd could keep legislation that would have been necessary to rein in Fannie Mae and Freddy Mac from being produced. And that’s what they did. This crisis is a housing crisis produced entirely by the Democrats.
The legislation used by Clinton originated with Jimmy Carter. Second worst president of this countrys history. Jimmy produced the Credit Reallocation Act to spread the wealth. Ignored by Reagan and Bush I, Clinton got his bulldog attorney general, Janet Reno to force the banks to loan to low credit score borrowers.
Bush tried 17 times to bring Freddie and Fannie under control. Barney and Chris would not allow the changes necessary that would have prevented the present crisis.
This is a Democratic recession. Entire due to Democratic legislation and actions.
In other words, Republicans are never to blame for anything that goes bad.
No, they are. From 2003-2006 they acted exactly like democrats. It is probably for that reason more than any other that the Tea Party was formed.
An then we hire the dude in charge of “Watching Wall Street” as our Treasury secretary.
Brilliant!
Politics is truly the occupation of the top crapping on everyone else. Obama said he has to clean up the “decades” of problems. That clearly implicates Clinton as being part of the problem. Yet Clinton smiles and comes back for more. Clinton is Kevin Bacon in Animal House.
4 – people forget about Jumping Jim Jeffords.
Andy DC says:
September 6, 2012 at 4:53 pm
Gator, Isn’t my memory correct that the Republicans controlled Congress six of the eight years of the Bush term
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Congress has nothing to do with the “Senate Finance committe”, controled by Democrats, Chriss Dodd, Barney Frank, who after Clinton sued the banks over a dozen times for not making the loans they wanted, then allowed Fannie to securtise the loans in bundles (SMPs) and leverage that money over 40 to one. The Banks, under govt pressure all followed suit, and they, like Barney Franks boyfriend at the GSE banks, got million dollar bonuses, for a while.
Bush tried but failed to wrest power from the democrat controlled sentate finance committie.
I could not have said it better myself, or I would have. 😉
Let’s not forget Franklin Raines either…