BS.
The 1999 repeal of the
Glass-Steagall Act, which had prohibited
commercial banks from undertaking
investment banking operations (and vice versa).
The Gramm-Leach-Bliley act reversed the Glass-Steagall act.
The culprits?
ALL republicans.
Financial Services Act were introduced in the
U.S. Senate by
Phil Gramm (
Republican of Texas) and in the
U.S. House of Representatives by
Jim Leach (R-Iowa). The third lawmaker associated with the bill was Rep.
Thomas J. Bliley, Jr. (R-Virginia), Chairman of the
House Commerce Committee from 1995 to 2001.
Bush initiatives were the policies that made them.
What’s more, in the Clinton push to issue home loans to lower income borrowers, Fannie Mae and Freddie Mac made a common practice to virtually end credit documentation, low credit scores were disregarded, and income and job history was also thrown asid
That was George.
President Bush is issuing
"America's Homeownership Challenge" to the real estate and mortgage finance industries to join in his effort to increase the number of minority homeowners by 5.5 million families by the end of the decade. Many organizations have already responded to the President's challenge by committing to:
- Substantially increase by at least $440 billion, the financial commitment made by the government sponsored enterprises involved in the secondary mortgage market, specifically targeted toward the minority market;
- Launching twenty-five different local initiatives across the nation, geared toward eliminating the specific homeownership barriers faced by minority families in those communities;
- Raising $750 million in below-market-rate investments by 2007, which will work in collaboration with local homeownership initiatives and be targeted to heavily minority program areas.
- Establishing multilingual, consumer-oriented internet Web sites designed to help minorities overcome barriers to homeownership, including creation of a central data bank of affordable housing programs made available to real estate agents when working with clients.
- The Administration proposed the Zero-Downpayment Initiative to allow the Federal Housing Administration to insure mortgages for first-time homebuyers without a downpayment. Projections indicate this could generate over 150,000 new homeowners in the first year alone.
The President proposed $2.7 billion in USDA home loan guarantees to support rural homeownership and $1.1 billion in direct loans for low-income borrowers unable to secure a mortgage through a conventional lender. These loans are expected to
provide 42,800 homeownership opportunities to rural families across America.
- President Bush signed the $200 million-per-year American Dream Downpayment Act which will help approximately 40,000 families each year with their downpayment and closing costs.
Two
proximate causes were the rise in
subprime lending and the increase in housing speculation. The percentage of lower-quality
subprime mortgages originated during a given year rose from the historical 8% or lower range to approximately 20% from 2004 to 2006, with much higher ratios in some parts of the U.S.
A high percentage of these subprime mortgages, over 90% in 2006 for example, had an
interest rate that increased over time.
Housing speculation also increased, with the share of mortgage originations to investors (i.e. those owning homes other than primary residences) rising significantly from around 20% in 2000 to around 35% in 2006–2007.
Investors, even those with prime credit ratings, were much more likely to default than non-investors when prices fell. These changes were part of a broader trend of lowered lending standards and higher-risk mortgage products.
Never had GSE's until BUSH allowed them.
