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March 16, 2009

Blame Democrats for mortgage mess

Democrats, including President Obama, act surprised by the fact that so many owe more on their homes than they are worth.
When Housing and Urban Development Secretary Henry Cisneros demanded that Fannie Mae and Freddie Mac invest 42 percent of their assets in buying low- and lower-middle-income mortgages, and when his successor, Andrew Cuomo, raised the quota to 50 percent, what did they think would happen?
When they explicitly told Fannie and Freddie not to insist on down payments in the mortgages they purchased, how did they think the purchase would be funded? Obviously, if you don’t require the borrower to put money down, the full purchase price must be covered by the mortgage.
The banking meltdown, and being upside down in mortgages, is a Democrat-caused problem, so they shouldn’t be surprised.
Chad Kincham
Liberty

Comments

solomon

It is wrong to put TOO much blame on Bush but it is correct that he wore the housing boom feather in his cap up until the moment it was no longer politically popular.

When will these [DELETED BY CONTRIBUTOR] realize that there is always a third most important concern with members of both parties, and we are it.

Pub 17

Go for it, Arminius. There's nothing you moonbats are better at than denying responsibility for anything and everything you do. I'm sure you have some explanation that makes sense to you, your teddy bear, and your invisible friend Larry why the Republican Party, with one if its own in the Oval Office twenty of the past twenty-eight years, isn't responsible for anything, having been held hostage by those wicked liberals, and all. Only, if you haven't noticed, nobody's listening anymore.

Arminius

lucius0729:

"How in the world is it a Democratic Party problem? The Republicans have been in control 20 of the last 22 years. Nothing could have been done without the GOP okaying it. The president can't even get anything done without Congress' approval. You are just another dittohead repeating what Rush and the other talkingheads have told you to say. Yopu need tp become a "true" liberal. The definition for liberal is a person that thinks for himself."

Not much thought in that post. Your facts are way off.

whispering_to_kc

[Fill in the blank] "is a Democrat-caused problem."

Why aren't we surprised. It's all you people have left to hang on to.

Jim

"..everytime a conservative makes the Barney Frank allegation and how all these democratic special interest groups lobbied Freddie and Fannie to make low income loans, they seem to change the subject when I ask them about statistics that quantify the impact."

You've noticed that, too? I've asked for details more times than I can count, and they all clam up every time. That's because their justification is so convoluted and thin it doesn't stand up to any scrutiny.

On Sunday, Dick Cheney blamed "Chairman Frank" for supposedly blocking oversight of Fannie/Freddie in 2005. Of course, Frank was not the Chairman of the Financial Services Committee in 2005, Michael Oxley, a Republican, was.

When Frank did assume the chairmanship in 2007, he sponsored HR 1427, a bill that would create the Federal Housing Finance Agency (FHFA) granting that agency "general supervisory and regulatory authority over" Fannie and Freddie and directing it to reform their business practices and regulate their exposure to risk.

That bill didn't go anywhere in the Senate, but the FHFA provision was folded into the Housing and Economic Recovery Act of 2008, which President Bush signed last summer.

It should also be noted that, in 2005, Frank worked with Oxley to get the FHFA into a previous bill, the Federal Housing Finance Reform Act of 2005, which got out of committee, but was loaded with poison-pill amendments later.

It's strange to see Conservatives trying not only to re-write history, but trying to say that the Bush White House and Frank were locked in some kind of struggle, with the White House pushing for reform and Frank blocking it. In fact, when Frank's reform bill passed the House in May 2007, the OMB was, despite resevations on a few provisions, publicly supportive of the bill:

http://www.whitehouse.gov/omb/legislative/sap/110-1/hr1427sap-h.pdf

There's a lot of blame to go around for this, to be sure. But saying it's all Barney Frank's fault (or even that it's all Fannie and Freddie's fault) is just laughable.

Pub 17

And you see the problem with advocacy vs. reportage: the Administration "warnings" cited weren't heeded by the Bush Administration. Read up on the resignation of John Snow, who in a clip is shown making dire predictions about Fannie Mae. He left in '06 saying he wanted to leave on a high note as the economy was in great shape, and no, the Administration wasn't trying to get rid of him.

History's gonna skewer the right over this one, forever and ever, amen.

Stifled Freedom

And it all went down on a 8 year Republican watch....and no one sounded any alarms. Both are to blame.

Casady

Call it what you will, Pub. My point is the oversite bill could have had the votes to pass since the Rpoubs had the majority in both the house and senate but they choose not to bring it to a full vote. While conservatives are rehashing history to blame lil ol Barney Frank for a global econonic meltdown, the record shows they could have put through an oversite bill if they were really that concerned at the time.

Here's what I was commenting on:

http://www.youtube.com/watch?v=cMnSp4qEXNM&NR=1

Pub 17

Casady, we need to put a stake in the heart of the myth of the "McCain" bill to restore oversight.

The record shows clearly that John McCain came on as a co-sponsor of the HEGEL oversight bill six months AFTER it had died in the Republican-led committee; in other words, he had no hand in creating the bill and signed on only after the bill was dead, dead, dead. Then, as was necessary for a bill that had died in committee, Hegel reintroduced it in the next Congress, and John McCain was nowhere to be found.

Casady

I'm not sure I would put much blame on Bush here but he did use statistics regarding increases in homeownership under his watch for political gain so it's not like he rallied against it. A conservative friend of mine sent me a Fox News clip which allegedly claimed that Bush warned of the crisis as early as 2001. While there was not much meat in the article to support this contention, I found it interesting that they mentioned that the 2005 McCain bill calling for more oversite made it out of committee along party lines but never went to the floor. Since Republicans had a majority in both the house and senate in 2005, why didn't they push the bill for a full vote if they were so concerned? My guess is that they were not.

Now PMCW, given your wealth of information and knowledge, can you provide any stat regarding the percentage of mortgages (in terms of dollars) that were made under the so called pressure to loan to lower income families that went into foreclosure? I'm not being a smart ass here, I am actually curious because everytime a conservative makes the Barney Frank allegation and how all these democratic special interest groups lobbied Freddie and Fannie to make low income loans, they seem to change the subject when I ask them about statistics that quantify the impact. One fact I do know and you can't deny this. Most of this message was the result of investment bankers securitizing this garbage and selling it downstream over and over again. They knew damn well what they were doing.

Roger Lambert

"Legislators requiring increasing government participation in, and quotas for, lending standards that went way beyond anything a common sense approach would tell you is fiscally prudent, all in the name of "increased home ownership" (and remember, Bush touted this increased ownership in every SOTU address through 2006 as a success of his administration)."


This is the major charge against Barney Frank et al. And, IMO, it does show the most blame of any elected politicians; namely, encouraging and sometimes bullying private lenders into making loans to risky borrowers that they otherwise would not make if not encouraged and/or bullied.

But of course there's a ton of blame to spread around. And much, much greed and stupidity.

Marctnts

Let's see...

Interests rates held too artificially low for too long encouraging the run-up in housing prices.

Private mortgage companies selling HUGE amounts of sub-prime loans, making lots of quick cash in the short term.

Individuals taking out 100+ mortgages with crazy ARM's that even the most basic understanding of budgets would indicate would be over their head at some point.

Insurers and large banks playing a very dangerous game by extremely underestimating the risk of derivatives and default swaps, piggy-backing on their corporate credit rating to greatly over-leverage themselves.

Rating agencies that were negligent in their duties to actually rate the risk these shaky instruments posed and their effect on the issuing institutions, instead making money hand-over-fist while standing behind the legal opinion that their ratings are nothing more than their "first amendment right to free speech", and as such, not to be held to standards.

Government regulators turning a blind eye to the whole thing under the impression that the market will always self-govern itself and the risk it is assuming.

Legislators requiring increasing government participation in, and quotas for, lending standards that went way beyond anything a common sense approach would tell you is fiscally prudent, all in the name of "increased home ownership" (and remember, Bush touted this increased ownership in every SOTU address through 2006 as a success of his administration).

I'd say there's plenty of blame to go around, and only a naive view of the issue would allow the full burden of blame to be neatly laid at one party's feet.

lucius0729

How in the world is it a Democratic Party problem? The Republicans have been in control 20 of the last 22 years. Nothing could have been done without the GOP okaying it. The president can't even get anything done without Congress' approval. You are just another dittohead repeating what Rush and the other talkingheads have told you to say. Yopu need tp become a "true" liberal. The definition for liberal is a person that thinks for himself.

pmcw

Do some research, Barny Frank led the charge to block regulation of the GSE, Fannie and Freddie.

Let's see the Democrats get enraged enough to force the CEO's who were clearly misleading stockholders at both companies in order to win unearned bonuses pay back the tens of millions they stole. Opps, forgot, they are also Democrats - you know, those guys who don't have to pay tax until appointed to a government job...

viet-vet1970

Dubya was in power for eight years, with Republicans controlling Congress for most of that time.

So why didn't Dubya and the GOP fix the problem you say was created by Cisneros and Cuomo?

Because too many Republicans were getting rich off the housing bubble. That's why the GOP went along for the ride.

There's plenty of blame to go around CHAD, so why don't you eat your share?

 
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