What is the Tunnel Wall?

.........................A timely collection of conservative articles about liberal influences on politics and culture in America ......................



Friday, May 27, 2016

Who and what caused the big housing crisis and economic tailspin? (Updated)

How Democrats Were Responsible For Mortgage Crisis That Led To Great Recession  . . . "The New York Times reported on this in 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.
"Even back then, there were skeptics. Specifically, the American Enterprise Institute raised alarms, saying if all these “low-income” mortgages fail, there would be a crisis." . . .
The one that Obama continually refers to to explain his own economic issues.

Rush brings us an economics lesson  Pay attention to this man; he is not some silly hack, but knows what goes on in government.
. . . "What really happened was in the nineties Bill Clinton ordered these loans to be made, and Janet Reno, who was the attorney general at the time, threatened these banks with investigations, open-ended investigations into whatever they might be doing if they didn't comply.  And so they did, just like they were all called into a room during the financial crisis and told they were going to take loans or subsidies or buyouts or whatever, $25 billion, even the banks that didn't need it.  This was TARP.  
"So that's what led to the subprime mortgage.  It was a disaster brought to you by the United States government as presided over by Bill Clinton at the time.  It's inarguable, this is what happened.  Your average Democrat doesn't know it.  They have bought hook, line, and sinker a total different story, including elected Democrats."  . . . 

. . . " "Last year," it says here, which would have been 1998, "44% of loans Fannie Mae purchased are from moderate and low income."  It was expanding.  The pressure was on.  Janet Reno was out demanding these banks lend the money or we're gonna investigate you for whatever we can find. " . . . 

. . . "George W. Bush was governor of Texas.  George W. Bush had nothing to do with any of this.  In fact, the truth of the matter is, George W. Bush and the inspectors general, the investigators, tried to shut it down, and Barney Frank told the investigators to go pound sand. " . . . 

Some mud wrestling on the subject:

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