The roots of this crisis go back to the Carter administration. That was when government officials, egged on by left-wing activists, began accusing mortgage lenders of racism and "redlining" because urban blacks were being denied mortgages at a higher rate than suburban whites.
The pressure to make more loans to minorities (read: to borrowers with weak credit histories) became relentless. Congress passed the Community Reinvestment Act, empowering regulators to punish banks that failed to "meet the credit needs" of "low-income, minority, and distressed neighborhoods." Lenders responded by loosening their underwriting standards and making increasingly shoddy loans. The two government-chartered mortgage finance firms, Fannie Mae and Freddie Mac, encouraged this "subprime" lending by authorizing ever more "flexible" criteria by which high-risk borrowers could be qualified for home loans, and then buying up the questionable mortgages that ensued.
All this was justified as a means of increasing homeownership among minorities and the poor. Affirmative-action policies trumped sound business practices.
"Lack of credit history should not be seen as a negative factor," the Fed's guidelines instructed. Lenders were directed to accept welfare payments and unemployment benefits as "valid income sources" to qualify for a mortgage. Failure to comply could mean a lawsuit.
But his fingerprints are all over this fiasco. Time and time again, Frank insisted that Fannie Mae and Freddie Mac were in good shape. Five years ago, for example, when the Bush administration proposed much tighter regulation of the two companies, Frank was adamant that "these two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis." When the White House warned of "systemic risk for our financial system" unless the mortgage giants were curbed, Frank complained that the administration was more concerned about financial safety than about housing.
Now that the bubble has burst and the "systemic risk" is apparent to all, Frank blithely declares: "The private sector got us into this mess." Well, give the congressman points for gall. Wall Street and private lenders have plenty to answer for, but it was Washington and the political class that derailed this train. If Frank is looking for a culprit to blame, he can find one suspect in the nearest mirror.
Granting loans to minorities. Pressuring banks to give loans to people without credit worthiness threatening lawsuits from Barak Obama's group called ACORN.
See the plot thickens now when you see the full picture, and the liberal media actually doing what it is paid to do. Investigate the truth without taking sides.
For too long the liberal media has blamed the Bush administration, meanwhile through the back door, Democratic leaders like Christopher Dood, and Barney Frank were sabotaging our financial stability and single handily crashed the housing market in the United States for years to come.
Democrats can blame the eight years of Bush's failed economic policies all they want.
Now, behold, the truth and the whole truth is coming out and it is the governments interfering with the banking system, and forcing banks to loan money to minority borrowers who did not qualify, threatening racial lawsuits and monetary judgments.
All in the name of the glorious Marxist, socialism plan of Barney Frank, Christopher Dodd and yes, Barak Obama and his ties to ACORN who were the very firm that threatened lawsuits and received monetary paypacks for putting pressure on the FED'S to loan the money to minorities.
Change...this is the change Barak Obama is calling for?
Barney Frank Cried Racism And Look What Happened
It's all the Democrats' fault. It's all Fannie & Freddie's fault. It's all Obama's fault. Goldman-Sachs was the only investment bank playing games with home mortgages/securities for trade.
