Obama critcizes banks for risky mortgages. (Congress, Whitehouse, independent, dollars)
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Lenders sold loans to families who couldn’t afford them. Banks packaged those mortgages up and traded them for phony profits. It drove up prices and created an unsustainable bubble that burst – and left millions of families who did everything right in a world of hurt.
Where does he mention that this was encouraged by the federal government?
It was worse than encouraged. It was mandated and carried stiff penalties if they didn't make the loans.. I wish people would take the time to read up on the Community Reinvestment Act.. That includes the moron in the Whitehouse.. Wait, he knows about it... Just trying to make it sound like it wasn't the governments (his) fault and well..
Where does he mention that this was encouraged by the federal government?
Hindsight is 20/20. President Bush was touting home ownership levels when he ran for President in 2000.
Encouraging home ownership isn't bad. But when banks lumped mortgage backed security swaps with large numbers of unsustainable mortgages and interest rates started going up, well. Boom
Hindsight is 20/20. President Bush was touting home ownership levels when he ran for President in 2000.
Encouraging home ownership isn't bad. But when banks lumped mortgage backed security swaps with large numbers of unsustainable mortgages and interest rates started going up, well. Boom
This is true, but it is also true that Bush sounded the alarm about Freddie and Fannie and it fell on deaf ears in the house at the time. I'm not a big Bush fan and he holds some responsibility in the meltdown, but lets be realistic. This was a long time in the making. This may jog your memory. http://nicedeb.wordpress.com/2008/09...in-2008-alone/
Flashback: Obama administration pressures banks to make risky loans | Hans Bader | Opinion Zone | Washington Examiner (http://washingtonexaminer.com/blogs/opinion-zone/2011/05/obama-administration-pressures-banks-make-risky-loans - broken link)
Quote:
Now, reports Business Week, “the Obama administration Department of Justice has created a twenty-person task force” to bring more discrimination cases against banks that don’t make enough loans in poor or disadvantaged areas. The government is also adopting more onerous interpretations of the Community Reinvestment Act and fair-lending laws to force banks to make more risky loans:
Lenders sold loans to families who couldn’t afford them. Banks packaged those mortgages up and traded them for phony profits. It drove up prices and created an unsustainable bubble that burst – and left millions of families who did everything right in a world of hurt.
Obama is 100% correct. Not to mention on top of that, Bush gave the banks that destroyed countless people's lives billions of dollars in bailouts paid for by the taxpayer.
The housing disaster is a perfect example of what happens when those hard right "less government!" "less regulations!" cries come true.
Obama is 100% correct. Not to mention on top of that, Bush gave the banks that destroyed countless people's lives billions of dollars in bailouts paid for by the taxpayer.
The housing disaster is a perfect example of what happens when those hard right "less government!" "less regulations!" cries come true.
It was worse than encouraged. It was mandated and carried stiff penalties if they didn't make the loans.. I wish people would take the time to read up on the Community Reinvestment Act.. That includes the moron in the Whitehouse.. Wait, he knows about it... Just trying to make it sound like it wasn't the governments (his) fault and well..
This guy is so anti-business it's amazing..
I've read up on the Community Reinvestment Act and it was not the primary cause of the housing bubble and subsequent collapse. The housing bubble was driven by firms not even under the CRA mandates.
As Levitin and Wachter have reported on the basis of their careful survey of all the relevant research data, “there is little evidence that the CRA contributed directly to the bubble. CRA subject institutions made a disproportionately small share of subprime mortgage loans,” and “relatively few subprime loans even qualified for CRA credit ,either because they were made outside CRA assessment areas or were made to higher income borrowers.”[7] The findings of the Federal Reserve staffers Avery and Brevoort’s were similar: that “areas covered by the CRA experienced lower delinquency rates and less risky lending,”[8] not higher ones. “According to recent Fed data, 75 percent of higher-priced loans made during the peak years of the subprime boom were made by independent mortgage firms and bank affiliates not covered by the act.”[9] “Only 6% of…subprime loans had any connection to the law. Loans made by CRA-regulated lenders in the neighborhoods in which they were required to lend,” the Financial Crisis Inquiry Report noted, “were half as likely to default as similar loans made in the same neighborhoods by independent mortgage originators not subject to the law.” Which is presumably why the Report could definitely conclude, as it did, that “the CRA was not a significant factor in subprime lending or the crisis.”[10]
Obama is 100% correct. Not to mention on top of that, Bush gave the banks that destroyed countless people's lives billions of dollars in bailouts paid for by the taxpayer.
The housing disaster is a perfect example of what happens when those hard right "less government!" "less regulations!" cries come true.
Exactly what I was going to say.
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