New York Times Article From 1999

[\GoBillsInDallas/]

http://query.nytimes.com/gst/fullpage.html...mp;pagewanted=1

 

'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.'

 

'''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.'''

 

'Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.'

[SDS]

http://query.nytimes.com/gst/fullpage.html...mp;pagewanted=1

 

'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.'

 

'''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.'''

 

'Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.'

 

This just speaks to the complete failure of George Bush's economic policies. He wasn't even president yet and he still managed to #$%^$#^ it up!

[elegantelliotoffen]

This just speaks to the complete failure of George Bush's economic policies. He wasn't even president yet and he still managed to #$%^$#^ it up!

 

You're right, Bush was completely powerless to fix this during the 6 years of Republican majorities in both the House and Senate.

[KD in CA]

You're right, Bush was completely powerless to fix this during the 6 years of Republican majorities in both the House and Senate.

 

 

Yes, and have retards like you scream about him being "racist" and declaring "war on poor people" by not letting them get mortgages.

 

It's amazing how the collective IQ of this board drops when you are around.

 

[bills_fan_in_raleigh]

I would love to see evidence that shows that the borrowing to the lower income caused these foreclosures or to the middle/upper class wanna bees that were buying 500K+ houses immediately out of college or with huge other debts. My guess many of the foreclosures are in suburbia and many of the me me me drones.

[Chef Jim]

I would love to see evidence that shows that the borrowing to the lower income caused these foreclosures or to the middle/upper class wanna bees that were buying 500K+ houses immediately out of college or with huge other debts. My guess many of the foreclosures are in suburbia and many of the me me me drones.

 

You'd be wrong.

[Gavin in Va Beach]

You're right, Bush was completely powerless to fix this during the 6 years of Republican majorities in both the House and Senate.

 

You mean like when they tried to make a fix in 2003? Oh and who led the effort to do nothing? Barney Frank - D

 

http://www.taxfoundation.org/blog/show/23617.html

 

An excerpt of his opening statement:

 

I want to begin by saying that I am glad to consider the legislation, but I do not think we are facing any kind of a crisis. That is, in my view, the two government sponsored enterprises we are talking about here, Fannie Mae and Freddie Mac, are not in a crisis. We have recently had an accounting problem with Freddie Mac that has led to people being dismissed, as appears to be appropriate. I do not think at this point there is a problem with a threat to the Treasury.

 

I must say we have an interesting example of self-fulfilling prophecy. Some of the critics of Fannie Mae and Freddie Mac say that the problem is that the Federal Government is obligated to bail out people who might lose money in connection with them. I do not believe that we have any such obligation. And as I said, it is a self-fulfilling prophecy by some people.

 

So let me make it clear, I am a strong supporter of the role that Fannie Mae and Freddie Mac play in housing, but nobody who invests in them should come looking to me for a nickel--nor anybody else in the Federal Government. And if investors take some comfort and want to lend them a little money and less interest rates, because they like this set of affiliations, good, because housing will benefit. But there is no guarantee, there is no explicit guarantee, there is no implicit guarantee, there is no wink-and-nod guarantee. Invest, and you are on your own.

 

Now, we have got a system that I think has worked very well to help housing. The high cost of housing is one of the great social bombs of this country. I would rank it second to the inadequacy of our health delivery system as a problem that afflicts many, many Americans. We have gotten recent reports about the difficulty here.

 

Fannie Mae and Freddie Mac have played a very useful role in helping make housing more affordable, both in general through leveraging the mortgage market, and in particular, they have a mission that this Congress has given them in return for some of the arrangements which are of some benefit to them to focus on affordable housing, and that is what I am concerned about here. I believe that we, as the Federal Government, have probably done too little rather than too much to push them to meet the goals of affordable housing and to set reasonable goals. I worry frankly that there is a tension here.

 

The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disastrous scenarios. And even if there were a problem, the Federal Government doesn't bail them out. But the more pressure there is there, then the less I think we see in terms of affordable housing.

 

 

[SDS]

I would love to see evidence that shows that the borrowing to the lower income caused these foreclosures or to the middle/upper class wanna bees that were buying 500K+ houses immediately out of college or with huge other debts. My guess many of the foreclosures are in suburbia and many of the me me me drones.

 

that may be true, I don't know, but the foundation was laid long before GB came into office. Risky loans are risky loans no matter who the loans are given to.

 

This is not me defending GWB so much (I have little support for the man), but this whole blaming this crisis on the last 8 years is appalling. If the NY Times has their own article in the business section on this in 1999 - where is the front page article highlighting this? If we have video of Barney Frank declaring how there is no problem over at Freddie/Fannie - why isn't the media hammering him? Instead he gets to help lead this Bill? Seriously? People are ok with how this is being spun on GWB? Their hatred for him is so intense that they will ignore the reality of the situation?

[elegantelliotoffen]

You mean like when they tried to make a fix in 2003? Oh and who led the effort to do nothing? Barney Frank - D

 

http://www.taxfoundation.org/blog/show/23617.html

 

An excerpt of his opening statement:

 

 

 

 

:wallbash

 

 

So the all powerful Barney Frank was able to derail any of Bush's reforms at a time when Bush had an approval rating in the 60's and Frank was in the House minority? Ever hear of Tom Delay?

[bills_fan_in_raleigh]

that may be true, I don't know, but the foundation was laid long before GB came into office. Risky loans are risky loans no matter who the loans are given to.

 

This is not me defending GWB so much (I have little support for the man), but this whole blaming this crisis on the last 8 years is appalling. If the NY Times has their own article in the business section on this in 1999 - where is the front page article highlighting this? If we have video of Barney Frank declaring how there is no problem over at Freddie/Fannie - why isn't the media hammering him? Instead he gets to help lead this Bill? Seriously? People are ok with how this is being spun on GWB? Their hatred for him is so intense that they will ignore the reality of the situation?

But both of these parties of morons deserve the blame, you seem to always lean on the side its Clintons and the Dems faults. The republicans have controlled congress for along time prior to 2006 since the contract with America . I think alot of the folks yelling and screaming probably need to look in the mirro and question their own fiscal behaviours.

[GG]

Sure, let's ignore the legislative realities in our finger pointing. Yes, GOP had the majority. But there was no chance in hell any reform was coming out of committees, nor did the GOP have enough filibuster-proof votes to get it up for a signature.

[Taro T]

But both of these parties of morons deserve the blame, you seem to always lean on the side its Clintons and the Dems faults. The republicans have controlled congress for along time prior to 2006 since the contract with America . I think alot of the folks yelling and screaming probably need to look in the mirro and question their own fiscal behaviours.

Yes, they had held a narrow majority in the House until the last election. As demonstrated by the vote yesterday, just because you have a majority doesn't mean you will pass what legislation you bring up.

 

Barney is, and was, a very powerful member of Congress and has been an ardent supporter of Fannie and Freddie for many years. There is absolutely no way any meaningful legislation was going to get approved unless Barney was on board or the Republicans had a much larger majority. Neither was realistically going to happen.

 

Should the miraculous have happened, and all the Republicans in the House voted for it; how exactly would it have gotten through the Senate? It wouldn't have, and the cries would have gone out about how the mean Republicans were trying to keep minorities from being able to get their share of the American dream.

[UConn James]

You mean like when they tried to make a fix in 2003? Oh and who led the effort to do nothing? Barney Frank - D

 

http://www.taxfoundation.org/blog/show/23617.html

 

An excerpt of his opening statement:

 

 

I would only say that encouraging F&F and irresponsible home buyers at that time by even hinting that the govt would back bad loans would've made for an even worse situation. Even if the tide was coming in, how could he have said anything else than 'No bailouts!'?

[molson_golden2002]

WASHINGTON, Sept. 27 (UPI) -- U.S. Securities Exchange Commission Chairman Christopher Cox, a longtime proponent of deregulation, says lack of oversight helped cause the financial crisis.

Cox made the admission Friday, saying the voluntary regulation program that had been in place to monitor Wall Street's largest investment banks had failed, The New York Times (NYSE:NYT) reported.

 

"The last six months have made it abundantly clear that voluntary regulation does not work," Cox said in a statement, adding that the program had been shut down and authority to regulate investment banks had been transferred to the Federal Reserve.

 

The program "was fundamentally flawed from the beginning, because investment banks could opt in or out of supervision voluntarily," the Times reported Cox as saying. "The fact that investment bank holding companies could withdraw from this voluntary supervision at their discretion diminished the perceived mandate" of the program, he said.

 

 

http://www.upi.com/Business_News/2008/09/2...83341222523054/

[molson_golden2002]

http://query.nytimes.com/gst/fullpage.html...mp;pagewanted=1

 

'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.'

 

'''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.'''

 

'Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.'

I have a hard time believing that loans to minorities caused all this. Sounds pretty far fetched

[colin]

it's loans made to people who can't/won't pay them back.

 

look up where the subprime defaults were, just do the math.

[GG]

It wasn't only subprime. Probably as good a read as any.

[bills_fan]

I have a hard time believing that loans to minorities caused all this. Sounds pretty far fetched

 

 

I would not say that. I would say that relaxed lending standards to all parties caused this.

 

Basically, banks were pressured to relaxed the old 20% down, 30 year fixed rate mortgage that my parents had. They were pressured by groups (such as ACORN) to do this so that socioeconomic groups unable to meet the standard could own a home. This relaxation, by itself is not a problem. Subprime lending was, for years, a niche market that helped everyone. But now the banks applied the relaxed lending standards to everyone...low income minorities, people wanting a $500k McMansion on $100k a year etc.

 

Each successive administration since Carter has pledged to "bring the American dream of home ownership" to more and more people. Banks kept relaxing their lending standards to more and more borrows (and making a boatload of cash in the process). More and more borrowers that had no business qualifying for a loan. You have seen the ads..."No Job, No Money, No Problem...$200,000 home loan for $300 a month!"

 

Nothing wrong with increasing home ownership, it just has to be done properly. New York City (not exactly the model of efficiency) ran a program where they made 1706 home loans to low income minority borrowers to increase home ownership. They capped the amount they lent, required down payments and courses in home ownership. Of those 1706 loans, only 5 were in default. Thats an astonishingly low number and the City should be applauded for running the program the right way and imposing limits/constraints, where people may not have done so themselves.

[UConn James]

 

Pretty amusing then, now.

[molson_golden2002]

I would not say that. I would say that relaxed lending standards to all parties caused this.

 

Basically, banks were pressured to relaxed the old 20% down, 30 year fixed rate mortgage that my parents had. They were pressured by groups (such as ACORN) to do this so that socioeconomic groups unable to meet the standard could own a home. This relaxation, by itself is not a problem. Subprime lending was, for years, a niche market that helped everyone. But now the banks applied the relaxed lending standards to everyone...low income minorities, people wanting a $500k McMansion on $100k a year etc.

 

Each successive administration since Carter has pledged to "bring the American dream of home ownership" to more and more people. Banks kept relaxing their lending standards to more and more borrows (and making a boatload of cash in the process). More and more borrowers that had no business qualifying for a loan. You have seen the ads..."No Job, No Money, No Problem...$200,000 home loan for $300 a month!"

 

Nothing wrong with increasing home ownership, it just has to be done properly. New York City (not exactly the model of efficiency) ran a program where they made 1706 home loans to low income minority borrowers to increase home ownership. They capped the amount they lent, required down payments and courses in home ownership. Of those 1706 loans, only 5 were in default. Thats an astonishingly low number and the City should be applauded for running the program the right way and imposing limits/constraints, where people may not have done so themselves.

Thanks, very informative as was GG's New Republic article