This actually started on Clintons watch. And, what did anything that Bush did cause a decline in home prices?
The U.S.
subprime mortgage crisis was a nationwide banking emergency that coincided with the U.S. recession of December 2007-June 2009.
It was triggered by a large decline in home prices, resulting in mortgage delinquencies and foreclosures and the devaluation of housing-related securities.
Subprime mortgages grew from 5% of total originations ($35 billion) in
1994,to 20% ($600 billion) in 2006
In
1998 Brooksley E. Born, head of the
Commodity Futures Trading Commission, put forth a policy paper asking for feedback from regulators, lobbyists, legislators on the question of whether derivatives should be reported, sold through a central facility, or whether capital requirements should be required of their buyers. Greenspan, Rubin, and Levitt pressured her to withdraw the paper and Greenspan persuaded
Congress to pass a resolution preventing CFTC from regulating derivatives for another six months — when Born's term of office would expire
.Ultimately, it was the collapse of a specific kind of derivative, the mortgage-backed security, that triggered the economic crisis of 2008.
Exactly. I wish more people grasped this. It wasn't all derivatives. The types of derivatives that do not have capital requirements, are the types that did not crash.
The types that crashed were mortgage backed securities, and specifically, sub-prime mortgage backed securities. And those securities do have capital requirements. All the requirements in the world, would not have prevented the crash.
A lot of people don't get this either. Capital requirements in Europe and Canada, are *LOWER* than they are here.... and yet the crash stated HERE. The problem was not a lack of regulation. The problem was regulation that pushed bad loans.
MORE garbage. I'm shocked, no really I am
PLEASE tell me what regulations Dubya/GOP passed that required this to happen:
It would've been 2003?
YOU KNOW WHERE WE WENT FROM ABOUT $200 TO OVER $600 BILLION A YEAR IN SUBPRIMES?
One president controlled the regulators that not only let banks stop checking income but cheered them on. And as president Bush could enact the very policies that caused the Bush Mortgage Bubble and he did. And his party controlled congress.
It is clear to anyone who has studied the financial crisis of 2008 that the private sector’s drive for short-term profit was behind it.
More than 84 percent of the sub-prime mortgages in 2006 were issued by private lending. These private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year. Out of the top 25 subprime lenders in 2006, only one was subject to the usual mortgage laws and regulations.
The nonbank underwriters made more than 12 million subprime mortgages with a value of nearly $2 trillion.
The lenders who made these were exempt from federal regulations.
Lest We Forget Why We Had A Financial Crisis - Forbes
You post this.
"One president controlled the regulators............"
and then you post this. "
The lenders who made these (loans) were exempt from federal regulations."
If the lenders were exempt from regulation, what good did it do to have control of the regulators?
The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets OCT 2008
DUBYA FOUGHT ALL 50 STATE AG'S IN 2003, INVOKING A CIVIL WAR ERA RULE SAYING FEDS RULE ON "PREDATORY" LENDERS!
Dubya was warned by the FBI of an "epidemic" of mortgage fraud in 2004. He gave them less resources. Later in 2004 Dubya allowed the leverage rules to go from 12-1 to 33-1 which flooded the market with cheap money!
Predatory Lenders' Partner in Crime
Predatory lending was widely understood to present a looming national crisis.
What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge?
Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye
In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative
washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html
FBI saw threat of loan crisis
It has the potential to be an epidemic,"
A top official warned of widening mortgage fraud in 2004, but the agency focused its resources elsewhere
"We think we can prevent a problem that could have as much impact as the S&L crisis,"
They ended up with fewer resources, rather than more.
FBI saw threat of loan crisis - Los Angeles Times
Again, the
Bush Administration gutted the White Collar Crime Division after 911.
(1,800 agents out of 'white collar' criminal division)
More from the NYtimes:
During these years, the bureau asked for an increase of $800 million, but received only $50 million more.
In the 2007 budget cycle, the F.B.I. obtained money for a total of one new agent for criminal investigations.
In 2004, one senior F.B.I. official, Chris Swecker, warned publicly that a flood of fraudulent mortgage deals had the potential to become “an epidemic.”
Yet the next year, as public warnings about fraud in the subprime lending markets began to approach their height,
the F.B.I. had the equivalent of only 15 full-time agents devoted to mortgage fraud out of a total of some 13,000 agents in the bureau.
That number has grown to 177 agents, who have opened 1,522 cases. But the staffing level is still hundreds of agents below the levels seen in the 1980s during the savings and loan crisis.
Shockingly, the FBI clearly makes the case for the need to combat mortgage fraud in 2005, the height of the housing crisis:
Financial Crimes Report to the Public 2005
The Bush
Rubber Stamp Congress ignored the obvious and extremely detailed and well reported crime spree by the FBI.
