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There was a young Senator that Harry Reid sponsored to filibuster against a push by Bush to reign in the government financial institutions on this very subject to keep it from coming a vote.
I don't recall who that was. Anybody else remember his name?
Oh please. This whole disaster was created by greedy, unethical people from the top down. From derivatives to credit, from the repeal of the Glass-Steagall Act to Fannie Mae, there were warning signals for decades. No one paid attention or no one cared.
Exactly and BOTH sides of the aisle were happy to support it because all those false growth numbers that Wall Street sold them made them look good, even if only temporarily.
Also, not a single bank was FORCED by any law or lawmaker to give a loan to anyone who they didn't choose to give it to. Banks and mortgage lenders were thrilled to be given cart blanche to loan money they KNEW they'd never get back.
Short term thinking for financial gain is not a D or R thing, it's a greed thing. And this country has no shortage of that top to bottom.
There was a young Senator that Harry Reid sponsored to filibuster against a push by Bush to reign in the government financial institutions on this very subject to keep it from coming a vote.
I don't recall who that was. Anybody else remember his name?
There was no need for filibuster, because practically all Republicans opposed Bushs attempt to remove regulation of financial institutions from Congress and place it under the White House. It was power grab attempt, and unconstitutional, and opposed by the GOP. If Bush had been successful in this, then Obama would now be in charge of regulating the financial institutions. Would that be a good thing? No, it would not.
The part you're leaving out is that most of the buyers who used those policies--the policies intended to make home ownership attainable to working class people--weren't individual home owners. They were speculators during the "flip this house" craze. In 2006 over a third of all house US purchases were made by people who already owned at least one house, and in states with the biggest housing crash it was well over half. Because they didn't plan on holding the properties for more than a few months, they didn't care about their interest rate or the terms of the mortgage--it was all about putting down a minimal amount of money up front and then reselling for a higher price quickly. The buying frenzy drove up prices, especially in states like Arizona, Florida, Nevada and California. When prices started to correct themselves and fall, the speculators were the ones who defaulted like dominos--they were holding multiple properties for less than they paid for them, so they went into foreclosure. That trickled down to individual homeowners, who were suddenly way under water on their mortgage through no fault of their own.
If those lending policies would have been limited to individual home owners, who DID plan on staying in the home long term and shopped around for the lowest mortgage rate and better terms, they wouldn't have seen the massive defaults that drove prices even further to the bottom.
Exactly and BOTH sides of the aisle were happy to support it because all those false growth numbers that Wall Street sold them made them look good, even if only temporarily.
Also, not a single bank was FORCED by any law or lawmaker to give a loan to anyone who they didn't choose to give it to. Banks and mortgage lenders were thrilled to be given cart blanche to loan money they KNEW they'd never get back.
Short term thinking for financial gain is not a D or R thing, it's a greed thing. And this country has no shortage of that top to bottom.
That's correct. It was Congress, not just two congressmen, that enacted the legislation that led to the subprime mortgage meltdown. The policy change was the enactment of "safe harbor" provisions of Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 that exempt derivative contracts from bankruptcy. This enabled banks and their parent holding companies to trade in derivatives (viz. mortgage-backed securities) on the financial markets with immunity. It was the sale of these securitized mortgages, and subsequent default on the repurchase agreements, that triggered the bank failures, the stock market crash, and subsequent recession. President Bush had no choice but to take over the failed banks, and move to stabilize the financial markets to prevent catastrophic economic collapse; however by then it was too late as the damage to the economy had been done. The economic fallout was unprecedented, the bailout unaccountable, and the legal issues unresolved. This is why the safe harbor provisions for derivative contracts should be repealed, and trading in these high-risk securities by bank entities disallowed. Dodd-Frank (which the banks say goes too far) doesn’t go far enough as it fails to address the derivatives problem effectively; and it will be up to Congress to enact remedial legislation to curb this undisclosed speculation (i.e., “shadow bankingâ€), or what happened before will surely happen again.
There was a young Senator that Harry Reid sponsored to filibuster against a push by Bush to reign in the government financial institutions on this very subject to keep it from coming a vote.
I don't recall who that was. Anybody else remember his name?
Who came up with the crazy idea you could sell houses to people too poor to keep them? Geesh.
I don't know why these men aren't in jail.
President Bush went to Congress repeatedly for years warning them that Fannie Mae and Freddie Mac were going to destroy the economy (17 times in 2008 alone). Democrats continuously ignored him, shut down his proposals along party lines and continued raiding the institutions for campaign contributions on their way down.
The vote for "affordable housing" was bipartisan. Take your blinders off.
Bush went before republicans during the 2004 convention and said "Tonight we set a new goal: 7 million more affordable homes in the next 10 years, so more American families will be able to open the door and say, "Welcome to my home."
Exactly and BOTH sides of the aisle were happy to support it because all those false growth numbers that Wall Street sold them made them look good, even if only temporarily.
Also, not a single bank was FORCED by any law or lawmaker to give a loan to anyone who they didn't choose to give it to. Banks and mortgage lenders were thrilled to be given cart blanche to loan money they KNEW they'd never get back.
Short term thinking for financial gain is not a D or R thing, it's a greed thing. And this country has no shortage of that top to bottom.
YES. Exactly. And we ignored it all. As far back as 1994, there were warnings that derivatives would be a cause of a terrible economic downturn. These things were reported in the pages of the Wall Street Journal, The Economist, Money, Time, etc. It really shouldn't have been a surprise to any of us.
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As far back as 1994, there were warnings that derivatives would be a cause of a terrible economic downturn. These things were reported in the pages of the Wall Street Journal, The Economist, Money, Time, etc. It really shouldn't have been a surprise to any of us.
