actually, its probably the lack of regulation that allowed mortgage companies to make shaky loans, subprime, to people who shouldn't qualify for mortgage credit. and before someone yells, "community reinvestment" from the roof tops, a) the community reinvestment discourages bad loans b) sub prime and lending in poor inner city areas are two different subjects
Fannie Mae and Freddie Mac never gave a loan to a subprime borrower (650 Credit score and 20% loan to value) until 1992. By 2005 50% (total number not percentage of assets) of Fannie/Freddie's 6 trillion dollar portfolio was sub-prime. They are the secondary mortgage provider to more than half of US mortgages and had leverage ratios (Freddie around 60x, Fannie around 20x) that were worse than investment banks and they had 100% of their assets in a single investment in US mortgages!! TARP has made a profit, whereas Fannie/Freddie has lost hundreds of billions and exposed the US taxpayer to TRILLIONS in mortgage liability. They are the biggest loser in this debacle by a huge amount. And also are one of the most government incestuous entities with huge amounts of government influence, regulation and control.
umm, you seem to be making the argument. it is lack of regulation over the last thirty years that allowed fannie and freddie to back these mortgages. you do know that they existed before 1992 don't you?
Yes but it was government oversight by HUD (government agency) that mandated the exposure to get into Sub-prime mortgages as a goal of increasing home ownership by Clinton and HUD secretaries Cisneros/Andrew Cuomo. So they were fine from founding to going public and issueing MBS in the 1970's until the government started mandating exposure to non-prime mortgages.
yes, they were fine with their REGULATIONS, i don't want to get into why the regulations were dropped. one could certainly argue that they were dropped to ease credit in low income areas, but what we got is credit easing EVERYWHERE. By the way, bush I is the first culprit in this, not clinton
Clinton isn't without fault when it comes to deregulation. Where there was Greenspan, there was deregulation.
totally agree, just pointing out this started with bush I, and continued through clinton, and bush II
Well thank you Ayn Rand... In a thread about a bill regarding pipeline safety you have yet to argue substantially about the merits or lack of merits regarding regulating pipeline safety but have gone on and on about Sarbanes Oxley and boilerplate Randian rhetoric. All this about a bill that oil and gas companies support. Also when you talk about the goal of the US Government the Constitution does say to protect the general welfare of the people and pipeline safety would qualify as the general welfare.
This is another part of conservative new speak and revisionist history where government deregulation is actually regulation. Basically its the government's fault and not the markets' While the Clinton admin did look at increasing home ownership, which the Bush 43rd Admin continued, it wasn't like the mortgage industry was dragged into subprime mortgages but eagerly embraced those.
The Tea Party....whatever it started as doesn't matter, what it is today, it is the party that all the racists and backwards people can feel a part of. At least they have a party now.
I posted this in a different thread, but it's really more fitting here. If you don't want to pay for a civilized society, you won't have one. Rather awesome that Kansas can afford to litigate the hell out of abortion, but cannot afford to keep laws on the books against domestic violence.
I am so glad that I do not live in China. Have been there a few times and it is God-aweful.... just terrible.... Still, I think your point is accurate..
