Bush's parting gifts: tough GDP number and unemployment

[cjma79]

I am going to make this easy for you Greg.
I am going to copy/paste what this Act did,

The Community Reinvestment Act (or CRA, Pub.L. 95-128, title VIII, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.) is a United States federal law designed to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods.[1][2][3] The Act was intended to reduce discriminatory credit practices against such neighborhoods, a practice known as 'redlining'.[4] The Act requires the appropriate federal financial supervisory agencies to encourage regulated financial institutions to meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation. (See full text of Act and current regulations.[5]) To enforce the statute, federal regulatory agencies examine banking institutions for CRA compliance, and take this information into consideration when approving applications for new bank branches or for mergers or acquisitions.[6]

Let me ask you a question, and please be honest.
Before this act(in the 80's) had you ever heard of subprime lending before?
Let me ask you this other question. Before this ACT do you know anybody that mortage their house 100% of value? Or was it minimum of 15% down payment?

I am going to tell you everything...
Lets see, before Clinton
1. You didnt have credit, you dont get a loan,
2. Even if you had good credit, you have to pay 15-20% down(NEVER IN OUR HISTORY WAS 100% FINANCING UNTIL CLINTON).
After Clinton
3. The subprime lending started the housing started to jump. Everybody could buy a house without anything, not even income. Banks didnt care, if they didnt pay, the Bank just resell the house and get the money back.
4. Also a lot of banks didnt care because Fannie and Freddy was buying all of this loans. Giving more money to the banks to lend and creating more loans. Pushing all of this money in the housing market,
5. Fannie and Freddie sold much of this loans in the stock markets, affecting wallstreet who thought they were save and backed by the federal gov.
6. Democrats pushed Fannie And Freddie to have a balanced 50-50, 50% good loans, and 50 subprime.
7. Republicans including Bush and McCain tryied to stop it.
9. The Housing market crashed.
10. Housing prices started going down, making all subprime loans in danger.
11. Payments on the loans went up.
12. People couldnt pay the payments.
13. Forecloser everywhere.
14. Most subprime loans where 100% to 95% of house value. Meaning if the house went down 5% of it value the banks would lose money.
15. Before, this wouldnt matter, unless a house lost 20% of value, Now by just losing 5% the banks are in trouble.
16. FINANCIAL CRISIS.

[cjma79]

You want more information??
Well here you have more...

In October 2000, in order to expand the secondary market for affordable community-based mortgages and to increase liquidity for CRA-eligible loans(remember CRA are subprime loans), Fannie Mae committed to purchase and securitize $2 billion of "MyCommunityMortgage" loans.[21][22] In November 2000 Fannie Mae announced that the Department of Housing and Urban Development (“HUD”) would soon require it to dedicate 50% of its business to low- and moderate-income families." It stated that since 1997 Fannie Mae had done nearly $7 billion in CRA business with depository institutions, but its goal was $20 billion.[19] In 2001 Fannie Mae announced that it had acquired $10 billion in specially-targeted Community Reinvestment Act (CRA) loans more than one and a half years ahead of schedule, and announced its goal to finance over $500 billion in CRA business by 2010, about one third of loans anticipated to be financed by Fannie Mae during that period.[

[jimmyP]

Enough blame to go around. I believe, from watching the recent debacles in congress, that we all can see that we have a fundamentally illiterate legislative branch on both sides of the aisle. The bankers probably pushed stuff by them and thought they were shootin' fish in a rain barrel.

[sindey]

Originally Posted by cjma79

Actually you are so wrong I dont know where to start.
The problem started with subprime lending,
Who created suprime lending?
Clinton

Actually cjma most of our problems began with deregulation and lack of oversite and that began 30 yrs ago under Reagan.
No ONE party is without blame.