New Study Finds Democrats Fully to Blame for Subprime Mortgage Crisis that Caused 200

[Doc91678]

by Jim Hoft
December 22, 2012

In his early activist days, Barack Obama the community organizer sued banks to ease lending practices.

State Sen. Barack Obama and Fr. Michael Pfleger led a protest against the payday loan industry demanding the State of Illinois to regulate loan businesses in January 2000. During his time as a community organizer Barack Obama led several protests against banks to make loans to high risk individuals. (NBC 5 Week of January 3, 2000)

Here’s something that won’t get any play in the liberal media…
A new study by the respected National Bureau of Economic Research found that Democrats are to blame for the subprime mortgage crisis.
Investor’s Business Daily reported:

Democrats and the media insist the Community Reinvestment Act, the anti-redlining law beefed up by President Clinton, had nothing to do with the subprime mortgage crisis and recession.

But a new study by the respected National Bureau of Economic Research finds, “Yes, it did. We find that adherence to that act led to riskier lending by banks.”

Added NBER: “There is a clear pattern of increased defaults for loans made by these banks in quarters around the (CRA) exam. Moreover, the effects are larger for loans made within CRA tracts,” or predominantly low-income and minority areas.

To satisfy CRA examiners, “flexible” lending by large banks rose an average 5% and those loans defaulted about 15% more often, the 43-page study found.

The strongest link between CRA lending and defaults took place in the runup to the crisis — 2004 to 2006 — when banks rapidly sold CRA mortgages for securitization by Fannie Mae and Freddie Mac and Wall Street.

CRA regulations are at the core of Fannie’s and Freddie’s so-called affordable housing mission. In the early 1990s, a Democrat Congress gave HUD the authority to set and enforce (through fines) CRA-grade loan quotas at Fannie and Freddie.​

Republicans warned Democrats of impending doom in 2004:

http://www.youtube.com/watch?v=Yga7TlsA-1A[/URL​

]


[URL="http://www.thegatewaypundit.com/2012/12/new-study-finds-democrats-fully-to-blame-for-subprime-mortgage-crisis-that-caused-financial-collapse/"]http://www.thegatewaypundit.com/2012/12/new-study-finds-democrats-fully-to-blame-for-subprime-mortgage-crisis-that-caused-financial-collapse/

 

[Old Rocks]

LOL. Whee................ The fruitloops get nuttier every day.

 

[Papageorgio]

There were so many reasons for the collapse of 2008 and BOTH parties were to blame, it went back to policies and laws since the Great Depression. We created a mess that should have imploded in 2001, but we found one last bubble to ride out and it lasted seven more years, be thankful it lasted as long as it did.

 

[Papageorgio]

LOL. Whee................ The fruitloops get nuttier every day.

If you can't see that both democrats and republicans and their policies for decades created the 2008 mess, you are nothing but a nutty partisan dumb ass.

 

[Procrustes Stretched]

Private sector loans, not Fannie or Freddie, triggered crisis

Read more here: Private sector loans, not Fannie or Freddie, triggered crisis | McClatchy

Another Conservative Myth Busted -- Did Fannie and Freddie Really Cause the Financial Sector Meltdown?

Actually, if you bothered to pay any attention to

New study confirms democrats crashed the economy DUH...​

By: ROBERT MOON
12/21/2012

A new study from the widely respected National Bureau of Economic Research released this week has confirmed beyond question that the left's race-baiting attacks on the housing market (the Community Reinvestment Act

-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.

-No one was making bad loans to unqualified people until Democrats came along and threatened to drag banks into court and have them fined and branded as racists if they didn't go along with the left's Affirmative Action lending policies...all while federally insuring their losses. Even the New York Times warned in the late 1990s that Democrats continuing to force banks into lowering their standards would lead to this exact catastrophe.​

(Excerpt)

Read more:
New study confirms economy was destroyed by Democrat policies - National Conservative | Examiner.com

"The strongest link between CRA lending and defaults took place in the runup to the crisis — 2004 to 2006 — when banks rapidly sold CRA mortgages for securitization by Fannie Mae and Freddie Mac and Wall Street."

Read More At IBD: New Study Blames Community Reinvestment Act For Mortgage Defaults - Investors.com

---


The One Hundred Ninth United States Congress was the legislative branch of the United States, composed of the United States Senate and the United States House of Representatives, from January 3, 2005 to January 3, 2007, during the fifth and sixth years of George W. Bush's presidency. House members were elected in the 2004 elections on November 4, 2004. Senators were elected in three classes in the 2000 elections on November 7, 2000, 2002 elections on November 5, 2002, or 2004 elections on November 4, 2004. The apportionment of seats in the House of Representatives was based on the Twenty-second Census of the United States in 2000. Both chambers had a Republican majority, the same party as President Bush.
109th United States Congress - Wikipedia, the free encyclopedia

---

In 2009 Frank responded to what he called "wholly inaccurate efforts by Republicans to blame Democrats, and [me] in particular" for the subprime mortgage crisis, which is linked to the financial crisis of 2007–2009.[52] He outlined his efforts to reform these institutions and add regulations, but met resistance from Republicans, with the main exception being a bill with Republican Mike Oxley that died because of opposition from President Bush.[52] The 2005 bill included Frank objectives, which were to impose tighter regulation of Fannie and Freddie and new funds for rental housing. Frank and Mike Oxley achieved broad bipartisan support for the bill in the Financial Services Committee, and it passed the House. But the Senate never voted on the measure, in part because President Bush was likely to veto it. "

If it had passed, that would have been one of the ways we could have reined in the bowling ball going downhill called housing," Oxley told Frank. In an op-ed piece in the Wall Street Journal, Lawrence B. Lindsey, a former economic adviser to President George W. Bush, wrote that Frank "is the only politician I know who has argued that we needed tighter rules that intentionally produce fewer homeowners and more renters."[7] Once control shifted to the Democrats, Frank was able to help guide both the Federal Housing Reform Act (H.R. 1427) and the Mortgage Reform and Anti-Predatory Lending Act (H.R. 3915) to passage in 2007.[52] Frank also said that the Republican-led Gramm–Leach–Bliley Act of 1999, which repealed part of the Glass–Steagall Act of 1933 and removed the wall between commercial and investment banks, contributed to the financial meltdown.[52]

Frank further stated that "during twelve years of Republican rule no reform was adopted regarding Fannie Mae and Freddie Mac. In 2007, a few months after I became the Chairman, the House passed a strong reform bill; we sought to get the [Bush] administration's approval to include it in the economic stimulus legislation in January 2008; and finally got it passed and onto President Bush's desk in July 2008. Moreover, "we were able to adopt it in nineteen months, and we could have done it much quicker if the [Bush] administration had cooperated."[53]

Barney Frank - Wikipedia, the free encyclopedia

 

[waltky]

Goldman Sachs, Morgan Stanley, other banks may join subprime settlement...

More banks may join Fed-led settlement
Thu, Jan 10, 2013 - Goldman Sachs Group Inc, Morgan Stanley and two other banks may agree as soon as this week to settle claims over botched foreclosures in an accord similar to one reached with 10 other loan servicers, two people briefed on the discussions said.

The agreement, also involving HSBC Holdings Inc and Ally Financial Inc, would end case-by-case reviews of foreclosures under earlier accords with the biggest mortgage servicers, said the people, who declined to be identified because the talks are private. The US Federal Reserve-led discussions specified at least US$1.5 billion in cash and assistance for borrowers, one of the people said. Ten servicers agreed on Monday to a US$8.5 billion settlement with the Fed and the Office of the Comptroller of the Currency (OCC) that ends the outside reviews in exchange for a deal that limits their costs to US$3.3 billion in cash for foreclosures in 2009 and 2010, and US$5.2 billion in other mortgage-related aid.

The new settlement could bring the industry payout to US$10 billion and expands beyond the 14 firms required to review foreclosures under the April 2011 agreement. IndyMac Bancorp’s successor OneWest Bank FSB, and EverBank Financial Corp have yet to reach settlements with regulators. “We continue to have conversations with the servicers we regulate who were under April 2011 enforcement actions but were not part of the settlement,” OCC spokesman Bryan Hubbard said. OneWest, EverBank and HSBC are included, he said.

Goldman Sachs and Morgan Stanley entered the mortgage servicing business through acquisitions. Goldman Sachs bought Litton Loan Servicing LP in 2007, and Morgan Stanley bought Saxon Capital Inc in 2006, before a housing market collapse that led to the worst financial crisis since the Great Depression. Litton initiated 135,586 foreclosure actions in 2009 and 2010, and Saxon initiated at least 60,313 actions in the same period, according to the Fed. Both New York-based banks later sold the servicers.

Morgan Stanley and Goldman Sachs were separately ordered by the Fed to hire outside consultants to conduct foreclosure reviews. Their case-by-case reviews paralleled those ordered in the April 2011 settlement. Eric Kollig, a Fed spokesman, declined to comment on settlement talks. Mary Claire Delaney, a Morgan Stanley spokeswoman, and Michael DuVally, a Goldman Sachs spokesman, also declined to comment. HSBC “remains in discussions” with regulators, according to Neil Brazil, a spokesman, who declined to comment further.

More banks may join Fed-led settlement - Taipei Times

 

[healthmyths]

LOL. Whee................ The fruitloops get nuttier every day.

YOU OLD FART!!!! Why is it so hard to understand REAlITY for you???

HERE is just two quotes from Franks/Dodds!!!

"Over the past six years, the President and his Administration have not only warned of the systemic consequences of failure to reform GSEs but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform at least 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems. Many prominent Democrats, including House Finance Chairman Barney Frank, opposed any legislation correcting the risks posed by GSEs.

* House Financial Services Committee Chairman Barney Frank (D-MA) criticized
the President's warning saying:
"these two entities - Fannie Mae and Freddie Mac - are not facing any kind of financial crisis .The more people exaggerate these problems,
the more pressure there is on these companies, the less we will see in terms of affordable housing."..
(Stephen Labaton, "New Agency Proposed To Oversee Freddie Mac And Fannie
Mae," New York Times, 9/11/03)

* Senate Committee on Banking, Housing and Urban Affairs Chairman Christopher Dodd also ignored the President's warnings and called on him to "immediately reconsider his ill-advised" position. (Eric Dash, "Fannie Mae's Offer To Help Ease Credit Squeeze Is Rejected, As Critics Complain Of Opportunism," New York Times, 8/11/07)

Now A recent study released 12/12/12..
" We find that adherence to the act led to riskier lending by banks: in the six quarters surrounding the CRA exams lending is elevated on average by about 5 percent every quarter and loans in these quarters default by about 15 percent more often.
These patterns are accentuated in CRA-eligible census tracts and are concentrated among large banks."
New study concludes that the Community Reinvestment Act ‘clearly’ did lead to risky lending | AEIdeas

AND idiots like you have NO idea what happened on 9/18/2008! All because dumbshits... like yOU get all your information from the totally biased MSM!!!

 

[bripat9643]

LOL. Whee................ The fruitloops get nuttier every day.

If you can't see that both democrats and republicans and their policies for decades created the 2008 mess, you are nothing but a nutty partisan dumb ass.

That's exactly what a partisan Democrat would say when they get caught with their hands in the cookie jar.

 

[NYcarbineer]

Anyone see the 10 billion dollar settlement Fannie Mae won from Bank of America the other day?

Bank of America reaches $10.3 billion settlement with Fannie Mae - Jan. 7, 2013

You can believe the rightwing nuts on who was to blame,

or, you can believe the law.

 

[Clementine]

LOL. Whee................ The fruitloops get nuttier every day.

You might want to watch the video, where in 2004, Republicans warned of an impending financial crisis and demanded more oversight and regulations, beginning with Fannie and Freddie. One Democrat after another stood up and blasted them, saying that if something isn't broke, you don't fix it and they claimed the whole effort to rein in the risky practices, specifically of F and F, was merely a political lynching of Franklin Raines. Raines ran the bank into the ground, then took off with millions in bonuses. He should be in jail, among others.

The 2004 showdown wasn't the first. Warnings started coming in the 90's and they kept trying to to investigate, but were shut down by a bunch of yelling Democrats every time.

 

[CrazedScotsman]

The left knows who is to blame and the left wanted the housing bubble to pop so the left could blame the right for the lefts criminal activity. The right thought the American people were smarter than they really are and it cost them the White House. The right knows those who support the left are about as bright as a one watt lightbulb or as dumb as a box of rocks, but the didn't expect over half of the American people to be that stupid and lost the White House yet again this election.

The left has been dumbing down the American people for decades and it's finally paying off. The American people don't care about this country, they only care about what "Their country can do for them".

 

[Flopper]

by Jim Hoft
December 22, 2012

In his early activist days, Barack Obama the community organizer sued banks to ease lending practices.

State Sen. Barack Obama and Fr. Michael Pfleger led a protest against the payday loan industry demanding the State of Illinois to regulate loan businesses in January 2000. During his time as a community organizer Barack Obama led several protests against banks to make loans to high risk individuals. (NBC 5 Week of January 3, 2000)

Here’s something that won’t get any play in the liberal media…
A new study by the respected National Bureau of Economic Research found that Democrats are to blame for the subprime mortgage crisis.
Investor’s Business Daily reported:

Democrats and the media insist the Community Reinvestment Act, the anti-redlining law beefed up by President Clinton, had nothing to do with the subprime mortgage crisis and recession.

But a new study by the respected National Bureau of Economic Research finds, “Yes, it did. We find that adherence to that act led to riskier lending by banks.”

Added NBER: “There is a clear pattern of increased defaults for loans made by these banks in quarters around the (CRA) exam. Moreover, the effects are larger for loans made within CRA tracts,” or predominantly low-income and minority areas.

To satisfy CRA examiners, “flexible” lending by large banks rose an average 5% and those loans defaulted about 15% more often, the 43-page study found.

The strongest link between CRA lending and defaults took place in the runup to the crisis — 2004 to 2006 — when banks rapidly sold CRA mortgages for securitization by Fannie Mae and Freddie Mac and Wall Street.

CRA regulations are at the core of Fannie’s and Freddie’s so-called affordable housing mission. In the early 1990s, a Democrat Congress gave HUD the authority to set and enforce (through fines) CRA-grade loan quotas at Fannie and Freddie.​

Republicans warned Democrats of impending doom in 2004:

http://www.youtube.com/watch?v=Yga7TlsA-1A[/URL​

]


[URL="http://www.thegatewaypundit.com/2012/12/new-study-finds-democrats-fully-to-blame-for-subprime-mortgage-crisis-that-caused-financial-collapse/"]http://www.thegatewaypundit.com/2012/12/new-study-finds-democrats-fully-to-blame-for-subprime-mortgage-crisis-that-caused-financial-collapse/

The changes to CRA which had support from both Republicans and Democrats and signed into law by Clinton allowed buyers to overextend themselves. The policies of the Bush administration allowed it to happen.

Why the Republicans speak falsehood Community Reinvestment Act. Bush has ordered 440 billion in subprime loans?

 

[MeBelle]

I really don't know what to think of this whole thing.
I would encourage anyone to click on the first link and check the graph.

New Study Blames Community Reinvestment Act For Mortgage Defaults - Investors.com

The Wiki link provides information on the people in charge of the respected NBER.


"But a new study by the respected National Bureau of Economic Research finds, "Yes, it did. We find that adherence to that act led to riskier lending by banks."
Added NBER: "There is a clear pattern of increased defaults for loans made by these banks in quarters around the (CRA) exam. Moreover, the effects are larger for loans made within CRA tracts," or predominantly low-income and minority areas.

National Bureau of Economic Research - Wikipedia, the free encyclopedia

Notable members:

Nobel Prize winners
Christopher Sims 2011
Thomas Sargent 2011
Peter Diamond 2010
Dale Mortensen 2010
Paul Krugman 2008
Edward C. Prescott 2004
Finn Kydland 2004
Robert F. Engle 2003
Joseph Stiglitz 2001
George Akerlof 2001
James J. Heckman 2000
Daniel L. McFadden 2000
Robert C. Merton 1997
Myron S. Scholes 1997
Robert E. Lucas 1995
Robert W. Fogel 1993
Gary S. Becker 1992
George J. Stigler 1982
Theodore W. Schultz 1979
Milton Friedman 1976
Wassily Leontief 1973
Simon Kuznets 1971

Council of Economic Advisers (CEA) Chairpeople
In chronological order
Alan Krueger
Austan Goolsbee
Christina Romer
Edward Lazear
Ben Bernanke
Harvey Rosen
N. Gregory Mankiw
R. Glenn Hubbard
Janet Yellen
Joseph Stiglitz
Michael Boskin
Martin Feldstein

Other notable members
Alberto Alesina
Robert Barro
Arthur Burns
Aaron Edlin
John Lipsky
Francis Longstaff
Anna Schwartz
Eduardo Schwartz
Richard Zeckhauser

 

[Mr. Shaman]

New Study Finds Democrats Fully to Blame for Subprime Mortgage Crisis that Caused 200

Yeah.....that's a lie.

Money, Power & Wall $treet

The Inside Story Of The Global Financial Crisis.

 

[g5000]

We've already been here, done that and debunked the hack site's (Investors.com) claims.

The CRA did not cause the crash. This was a global phenomenon. You going to blame the negroes of Iceland for the Iceland banking crisis? You going to blame the negroes of Ireland for the Irish banking crisis? Did negroes bring down RBS, too? Bankia?

Pathetic.

 

[g5000]

http://www.nber.org/papers/w18609.pdf?new_window=1

There is the actual study. Notice it does not say the CRA caused the economic collapse.

It says the CRA led to increased risky lending.

However, it also says:

This is also the period when private securitization boomed and might therefore reflect an unexplored channel through which this market induced risky lending in the economy.
In other words, there was increased risky lending across the board, and the increased CRA lending may have been just another channel of that trend.

And if you just opened your eyes, this would have been obvious. Look at all the middle class schmucks who bought more house than they could handle, and then took out HELOCs to buy boats and SUVs and take Disney vacations.

Look at all the middle class people whose loans blew up. A middle class schmuck can take on more debt than a low income person. That's why the middle class was the MAIN target, not the lower incomes. Lower income loans were just gravy on the main course.

This was not a CRA-driven phenomenon. This was driven by the mistaken belief on the part of the financial sector around the world that risk had magically been eliminated through the use of complex derivatives.

As I said above, this was a global derivatives bubble. Ireland blew up. Iceland blew up. Portugal blew up. Spain blew up. Greece blew up. England blew up.

 

[California Girl]

Both sides need to grow the fuck up and start joining the dots instead of constantly lying about the other side being responsible.

Americans themselves, our politicians, our banks... all responsible. Your fault. Own it. Stop bitching and force your side to work WITH the other side to fix it.

Or... carry on lying to yourselves, allowing your media to lie to you and for you, and accept your politicians are a clusterfucked corrupt bunch of assclowns who should be in prison.

 

[OriginalShroom]

ROFLMAO..

While there are some Republicans who deserve to share in the blame, it has been obvious for years that the Democratic Party and their supporters who pushed for CRA and laws that forced banks to make loans that they otherwise would not have and then, when called upon, in 2000 and 2002 to take steps to correct the situation refused to and called President G. W. Bush and the Republicans "Racists" carry a much greater amount of the responsibility for the American Housing Market Crash.

It was foretold and warned about and the Democrats refused to do anything to prevent it.

 

[OriginalShroom]

Both sides need to grow the fuck up and start joining the dots instead of constantly lying about the other side being responsible.

Americans themselves, our politicians, our banks... all responsible. Your fault. Own it. Stop bitching and force your side to work WITH the other side to fix it.

Or... carry on lying to yourselves, allowing your media to lie to you and for you, and accept your politicians are a clusterfucked corrupt bunch of assclowns who should be in prison.

Sounds like a typical Liberal... When faced with having to admit that their party was responsible, blames the other side as well.

 

[Dot Com]

ROFLMAO..

While there are some Republicans who deserve to share in the blame, it has been obvious for years that the Democratic Party and their supporters who pushed for CRA and laws that forced banks to make loans that they otherwise would not have and then, when called upon, in 2000 and 2002 to take steps to correct the situation refused to and called President G. W. Bush and the Republicans "Racists" carry a much greater amount of the responsibility for the American Housing Market Crash.

It was foretold and warned about and the Democrats refused to do anything to prevent it.

curiosly you supplied no links Heres a couple:
FactWatch: Fannie and Freddie were followers, not leaders, in mortgage frenzy | The Center for Public Integrity
Fannie Mae and Freddie Mac were victims, not culprits - BusinessWeek