Iraq War Updates 2007 – 2010

While many pundits are pointing to corporate greed and a lack of government regulation as the cause for the American mortgage and financial crisis, some analysts are saying it wasn’t too little government intervention that cased the mortgage meltdown, but too much, in the form of activists compelling the government to pressure Freddie Mac and Fannie Mae into unsound – though politically correct – lending practices.

“In an attempt to increase homeownership, particularly by minorities and the less affluent, an attack on underwriting standards was undertaken by virtually every branch of the government since the early 1990s,” Liebowitz writes. “The decline in mortgage underwriting standards was universally praised as ‘innovation’ in mortgage lending by regulators, academic specialists, (government-sponsored enterprises) and housing activists.”

An article in the Los Angeles Times from the late ‘90s praised the sudden surge in homeownership among minorities, calling it “one of the hidden success stories of the Clinton era.”

A New York Times article from Sept. 1999 states that Fannie Mae had been under increasing pressure from the Clinton administration to expand mortgage loans among low- and moderate-income people and that the corporation loosened its lending requirements to comply.

When Greg Mankiw, chairman of President Bush’s Council of Economic Advisers, voiced a warning about weakened underwriting standards, he was rebuffed by Congress..

The Wall Street Journal quoted Congressman Barney Frank, D-Mass., in 2003 as criticizing Greg Mankiw “because he is worried about the tiny little matter of safety and soundness rather than ‘concern about housing.’”

Frank, chairman of the House Financial Services Committee, rejected a Bush administration and Congressional Republican plan for regulating the mortgage industry in 2003, saying, “These two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis.” According to a New York Times article, Frank added, “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Analysts point not to greed, but to social activist politics

And we want to put another social activist in office as our President….who’s an Anti-American Racist Socialist idiot, who will finish what Bill Clinton started! Absolutely asinine!

____________

Here is the actual New York Times article from Sept. 1999:

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.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates—anywhere from three to four percentage points higher than conventional loans.

…In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.

‘’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.’’

…Under Fannie Mae’s pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000—a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped. Source

_____________

“Here lies, in honored glory, an American soldier, known but to God.”

“Glory is not a conceit. It is not a decoration for valor. Glory belongs to the act of being constant to something greater than yourself, to a cause, to your principles, to the people on whom you rely, and who rely on you in return.”
Senator John McCain, Faith of Our fathers