RMM Loc: Suburban New York

Did I say it was all Bush's fault? There's lots of glory to share. Although he did get us into a couple of multi-trillion dollar wars without doing a thing to pay for them, so that certainly counts for something. Nonetheless, the point is simple, and amply demonstrated: The financial institutions need to be regulated to prevent them from risking other people's money irresponsibly. After the Great Depression, such regulations existed, and we did pretty well. When the regulations were removed, we were left teetering on the edge of a second Great Depression, and there are those that will argue we have tipped over into one for all practical purposes. That includes me.

Discuss away.

Phreedom Loc: Kitchener, Ontario, Canada

Unfortunately, both parties require enormous funding, which comes from (you fill it in) and thus whoever is voted in owes allegiance to (you fill it in) and we're the monkeys in the middle.
To paraphrase a well known quote: if you tell a big enough lie(s), often enough, people will believe it (them).

ggttc Loc: TN

"Your future ain't what it used to be"

Yogi Berra

ole sarg Loc: south florida

Blurryeyed here is a timeline re mortgagte and banking

AS you were saying those evil democrats....

A Timeline of Republicans’ Failure to Stop Reckless Mortgage Lending
September 2010
Republican leaders in Congress are understandably eager to deflect attention away from their failure to
rein in the reckless mortgage lending practices that contributed to the financial crisis. Republicans
controlled the House, Senate
*
, and White House from January 2001 to January 2007, when subprime
lending exploded and the housing bubble became fully inflated. That’s why, as a partisan diversionary
tactic, Republicans have chosen to distort Chairman Frank’s record. As the timeline below shows, these
Republican attacks are entirely baseless.  
The point here is not to litigate the past. The point is that, if Republicans have their way again, they will
champion the same deregulatory and laissez faire economic policies that enabled Wall Street to take
unacceptable risks and plunge the nation into economic crisis. In contrast, Democrats have passed
legislation allowing the Treasury Department to place Fannie Mae and Freddie Mac into conservatorship
and end the practices that put taxpayers at risk. Democrats have also passed far‐reaching Wall Street
reform that includes protections against predatory lending; and they are working to ensure that Fannie
Mae and Freddie Mac recover as much money as possible from unscrupulous lenders. At Wednesday’s
hearing, Democrats will examine the GSEs’ progress in reforming their operations and limiting losses.
1994‐2000: Democratic legislation to give Fed authority to rein in predatory lending precedes
Republican takeover of Congress and years of inaction
1994: In 1994, when Democrats controlled the House, Senate, and White House, they enacted the
Homeownership and Equity Protection Act (HOEPA). The law included a host of consumer protections
for high‐cost mortgages and required that the Federal Reserve issue rules to stop abusive lending
practices. Republicans took control of the House and Senate in the elections that November. During the
12 years of Republican control of Congress that followed, with some minor exceptions (noted below),
the Fed failed to use this authority to prevent the abusive practices that contributed to the subprime
mortgage crisis. Not until 2008 did Federal Reserve Chairman Ben Bernanke finally issue rules under the
authority that the Fed had held since 1994.
The cause of the Fed’s failure to act was not lack of authority. As then‐Fed Chairman Alan Greenspan
himself wrote in a May 30, 2002 letter to Rep. John LaFalce (D‐NY), then‐Ranking Member on the
Financial Services Committee, “The Board has recently issued rules under HOEPA to address certain
abusive or unfair practices in mortgage lending, including the sale and financing of single‐premium
credit insurance and loan flipping. Importantly, these rules apply to all types of creditors engaged in
mortgage lending, not just to banks as would have been the case under the Board’s FTC Act authority.”
A Wall Street Journal article succinctly captures Greenspan’s views:
Edward Gramlich, who was Fed governor from 1997 to 2005, said he proposed to Mr.
Greenspan in or around 2000, when predatory lending was a growing concern, that the Fed use
its discretionary authority to send examiners into the offices of consumer‐finance lenders that
were units of Fed‐regulated bank holding companies. "I would have liked the Fed to be a leader"
in cracking down on predatory lending, Mr. Gramlich, now a scholar at the Urban Institute, said
in an interview this past week. Knowing it would be controversial with Mr. Greenspan, whose
deregulatory philosophy is well known, Mr. Gramlich broached it to him personally rather than
take it to the full board.

*
Except for a brief period from mid 2001 to January 2003, when Democrats held a razor‐thin, one‐seat majority in the Senate.House Committee on Financial Services 2
"He was opposed to it, so I didn't really pursue it," says Mr. Gramlich, a Democrat who was one
of seven Fed governors.
Greenspan's Response
Mr. Greenspan, in an interview, says he doesn't recall a specific discussion of the idea but
confirmed his opposition to it.  
There is "a very large number of small institutions, some on the margin of scrupulousness and
very hard to detect when they are doing something wrong," says Mr. Greenspan, who retired in
February last year. "For us to go in and audit how they act on their mortgage applications would
have been a huge effort, and it's not clear to me we would have found anything that would have
been worthwhile without undermining the desired availability of subprime credits."
‐‐Excerpt from “Did Greenspan Add to Subprime Woes?,” Greg Ip, Wall Street Journal,
June 9, 2007
i
2000: In April 2000, the final year of the Clinton administration, then‐HUD Secretary Cuomo and then‐
Treasury Secretary Summers convened a joint HUD‐Treasury Department task force to examine
predatory lending issues. The Task Force issued recommendations for reining in predatory lending. The
proposals related to four specific issue areas: Consumer Literacy and Disclosure; Harmful Sales Practices;
Abusive Terms and Conditions; and Market Structure. Although Democrats in the House and Senate
introduced legislation to implement the task force’s recommendations, the Republican‐controlled
Congress refused to act on them.
2000s: Bush administration pushes homeownership, while Congressman Frank emphasizes
rental housing
2002: President George W. Bush announced a new initiative to create 5.5 million new homeowners by
2010. “The goal is, everybody who wants to own a home has got a shot at doing so,” the President said
at a June press conference in Washington. Among other things, the President cited “high down
payments” as a barrier to homeownership that needed to be addressed. The President also said that
both Fannie Mae and Freddie Mac would help in reaching the new goals.
ii
2004: The Bush administration continued its efforts to increase the U.S. homeownership rate. For
example, On January 19, 2004, the FHA announced a new proposal to offer zero‐down‐payment
mortgages.
iii
Congressman Frank expressed concerns about one initial proposal. As National Journal
reported in a March 6, 2004, article:
Last year, when the FHA's plan to insure subprime loans was included in a Senate‐passed
appropriations bill, Rep. Barney Frank, D‐Mass., the ranking member of the House Financial
Services Committee and a staunch supporter of low‐income housing, wrote a highly critical
letter urging that the measure not be included in the House‐Senate conference report.  
Not only had the House committee not examined or approved the proposal, he said then, but
the measure also offered no protection against lenders' inappropriately steering people toward
these high‐cost loans. Nor did it offer safeguards to ensure that participants "are fully suitable
for homeownership."
ivHouse Committee on Financial Services 3
On November 1, 2004, the U.S. Department of Housing and Urban Development finalized a rule
requiring Fannie Mae and Freddie Mac “to increase their purchase of mortgages for low‐ and moderate‐
income families and underserved communities.”
v
Earlier that year, Congressman Frank warned about
the new rules, saying the White House “could do some harm if you don’t refine the goals.”
vi
To help
meet these new requirements, the GSEs later began purchasing mortgage‐backed securities made up of
subprime loans.   
President Bush on Homeownership
Another priority for a new term is to build an ownership society, because ownership brings security and
dignity and independence. Thanks to our policies, home ownership in America is at an all‐ time high.  
Tonight we set a new goal: 7 million more affordable homes in the next 10 years, so more American
families will be able to open the door and say, ‘Welcome to my home.’
‐‐President George W. Bush, Thursday, September 2, 2004
vii
[I]f you own something, you have a vital stake in the future of our country. The more ownership there is
in America, the more vitality there is in America, and the more people have a vital stake in the future of
this country.  
‐‐President George W. Bush, June 17, 2004
Expanding Homeownership. The President believes that homeownership is the cornerstone of America's
vibrant communities and benefits individual families by building stability and long‐term financial
security. In June 2002, President Bush issued America's Homeownership Challenge to the real estate and
mortgage finance industries to encourage them to join the effort to close the gap that exists between
the homeownership rates of minorities and non‐minorities. The President also announced the goal of
increasing the number of minority homeowners by at least 5.5 million families before the end of the
decade. Under his leadership, the overall U.S. homeownership rate in the second quarter of 2004 was at
an all time high of 69.2 percent. Minority homeownership set a new record of 51 percent in the second
quarter, up 0.2 percentage point from the first quarter and up 2.1 percentage points from a year ago.
‐‐“America's Ownership Society,” White House fact sheet, August 9, 2004
viii
We can put light where there's darkness, and hope where there's despondency in this country. And part
of it is working together as a nation to encourage folks to own their own home.
‐‐President George W. Bush, October 15, 2002
ix
Congressman Frank on Affordable Rental Housing
In fact, Rep. Barney Frank (D., Mass.) is the only politician I know who has argued that we needed tighter
rules that intentionally produce fewer homeowners and more renters. Politicians usually believe that
homeownership rates should – must – go ever higher.
‐‐Lawrence Lindsey, former George W. Bush chief economics adviser, April 2, 2008
x
If you were to ask Democrats Barney Frank and Chris Dodd ‐‐ the principal architects of the massive
housing bill signed Wednesday by President Bush ‐‐ which of its many features pleases them most, the
answer would surprise you . . . [I]t is the section creating the National Housing Trust Fund, a creative
way of meeting the chronic shortage of affordable low‐income rental apartments. Frank, the
Massachusetts representative, said in a separate interview, "That's what I'm most proud of."
‐‐Excerpt from David Broder column, August 3, 2008
xiHouse Committee on Financial Services 4
It is hard for me to understand how anyone reading this report could fail to join us in trying to increase
the supply of affordable rental housing in our country.
‐‐Rep. Frank statement on National Low Income Housing Coalition report, April 7, 2008
The shortage of affordable rental housing for people with limited income continues to be one of our
most serious social crises and I am pleased that Senator Kerry is taking the lead in this regard. I look
forward to working with him and other members of the Senate in bringing this to a successful conclusion
next year.
‐‐Rep. Frank statement, December 19, 2007
Despite the crisis, Massachusetts Democratic Rep. Barney Frank, who heads the House Financial Services
Committee that likely will set new lending rules, is one of the few politicians willing to admit that
homeownership is not for everyone. "Not everyone is ready ever. A lot are not economically ready
now," Frank said in an interview with Reuters. "This administration is acting as if the only important
program to help people with housing issues is to get them into homeownership. I think that
overemphasis has contributed to the subprime crisis. People were put into homeownership who just
economically should not have been there."
‐‐Excerpt from Reuters article, April 3, 2007
xii
Frank said he will push to restore federal affordable rental housing programs that he said have been
"systematically dismantled" under the Bush administration. U.S. policies in recent years have denigrated
rental housing and perhaps overpromoted home ownership, he said. "We push people into home
ownership who shouldn't be there," he said.  
‐‐Excerpt from Reuters article, March 2007
Now even some in Washington are questioning the soundness of pushing homeownership so broadly.
United States policies in recent years promoted the idea of homeownership too hard and at the expense
of rental housing, said Representative Barney Frank, Democrat of Massachusetts. ''I wish people could
own more homes,'' he said in an interview yesterday. ''But I also wish I could eat and not gain weight.''
‐‐Excerpt from New York Times article, March 17, 2007
xiii
About 100 House members have signed a petition to force a floor vote on a stalled bipartisan bill that
would create a national trust fund to provide rental housing for low‐income families, bill supporters said
today . . . “The Republican leadership is keeping this off the floor because they know it is well‐designed
and very much needed, and it would pass,” said Financial Services ranking member Barney Frank, D‐
Mass. "It is not a case of us being able to compromise with them, because they don't want the subject to
come up."
‐‐Excerpt from CongressDaily article, September 2004
xiv
Some public housing advocates say the administration is pushing home buying at the expense of rental
help and the popular HOPE VI public housing redevelopment program. Others say Bush's
homeownership strategy is a ploy to control the deficit by offering relatively cheap and popular home‐
buying initiatives while cutting much more money from public and subsidized housing. "Housing has
been the piggy bank," said Rep. Barney Frank of Massachusetts, the ranking Democrat on the House
Financial Services Committee.
‐‐Excerpt from news article appearing in Sarasota Herald‐Tribune, June 20, 2004
xv
NAA/NMHC's effort to advocate for a more balanced housing policy continues to advance . . . Thanks to
an amendment by Rep. Barney Frank (D‐Mass.), it also included language reflecting serious concernsHouse Committee on Financial Services 5
over the proposal to restructure the Section 8 housing voucher program, which, if passed, would
ultimately reduce federal support for rental housing.
‐‐Excerpt from Units article, April 1, 2004 “Policy makers speak up for rental housing”
xvi
But almost by definition, the large majority of poor people are going to need rental housing. And we will
never alleviate the terrible housing crisis that affects so many people in this country if we do not do a
much better job of building decent, affordable rental housing.
‐‐Rep. Frank, Housing and Community Opportunity Subcommittee hearing, Feb. 13, 2002
2003‐2007: As reckless mortgage lending takes off, Republicans in Congress fail to respond
2004: Reps. Brad Miller (D‐NC), Mel Watt (D‐NC), and Frank worked to restrict predatory lending, but
Republicans blocked their efforts. States across the country sought to beef up their own protections
against predatory lending, but under the Bush administration regulators preempted state consumer
protection regulation of federally‐chartered banks. This prevented any state laws or rules regarding
predatory lending at federally‐chartered institutions from having any effect.  
2004‐2007: While the Republican Congress and the Bush administration looked on – and even provided
encouragement – Wall Street came to dominate the market for securitized mortgage products, including
securities backed by mortgages (MBS) held by homebuyers who were never required to document any
income, employment, or assets. A report from the Brookings Institution points out that, “while the GSEs
dominated the securitization market during the 1980s and 1990s, by 2000 they began losing market
share to private financial institutions as more and more subprime mortgages began to be securitized.”
xvii
The Brookings report points out that, in 2000, mortgage‐backed securities issued by the GSEs comprised
78 percent of total MBS issuance that year. By 2006, the GSEs’ share of MBS issuance had dropped to 44
percent. “As securitization became more widespread, and as the subprime mortgage market boomed,
private banks, broker dealers, and other institutions increasingly dominated the MBS market,” the
report notes.
In testimony before the Financial Crisis Inquiry Commission on February 25, 2010, Professor Dwight
Jaffee of the Haas School of Business at UC‐Berkeley reported that “the subprime lending innovations
over [the 2002 to 2007] period actively displaced GSE and FHA activity, leading to the declines in their
market shares.” Jaffee showed that the GSEs’ high risk lending increased from 21 percent of their overall
lending in 2003 to 51 percent by 2006. He also notes that, for both Fannie and Freddie, “the 2007
vintage has the highest default pattern, followed by 2006, and then by 2005.” These data reinforce the
notion that the GSEs followed Wall Street in expanding subprime lending in order to help regain market
share that they had lost to private‐label issuers.
2003‐05: The first effort during Republicans’ 12‐year control of Congress to reform the GSEs came in
2003, when then‐Financial Services Committee Chairman Mike Oxley (R‐OH) worked to pass a bill. That
year, Oxley had scheduled a Financial Services Committee markup of the legislation, but had to cancel
the markup due to White House opposition.  The legislation would have established a stronger regulator
to ensure the GSEs’ safety and soundness. As CBS Marketwatch reported on October 7, 2003:
Strong opposition by the Bush administration forced a top Republican congressman to delay a
vote on a bill that would create a new regulator for mortgage giants Fannie Mae and Freddie
Mac . . . The vote on Rep. Michael Oxley’s bill to reform oversight of government‐sponsored
entities including Fannie Mae and Freddie Mac was scheduled for Wednesday. Oxley, an Ohio
Republican, is chairman of the House Financial Services Committee.
xviiiHouse Committee on Financial Services 6
In 2005 Oxley tried again and this time got a reform bill through the House. Democrats unanimously
supported the bill in the Financial Services Committee. A majority of Democrats supported it on the
floor, though Congressman Frank and others voted against it because of unrelated restrictions it placed
on the Affordable Housing Trust Fund.  The bill passed the House, but the Bush administration and
Senate Republicans opposed the Oxley bill. Senate Democrats offered the House‐passed Oxley bill in
that chamber, but Senate Republicans, who held the majority, lacked the votes to pass the bill. They
took no action on any bill.
On September 14, 2006, members of the House Financial Services Committee who had supported GSE
reform, including Congressman Frank, sent a letter to then‐Senate Banking Committee Chairman
Richard Shelby urging the Senate to work with them to get a pill passed into law. The letter stated:  
Accounting violations by the GSEs have brought to light the fact that current GSE regulators la

Blurryeyed Loc: NC Mountains.

Sarge - How nice that you can go to a left leaning website probably MM or one of its derivatives and cut and paste a prepared attack on Bush and the republicans that is selective in facts and willfully omissive of the role played by democrats in the housing crisis.... I have some things to do this afternoon, but I will respond to your post sometime this evening, as I will not simply cut and paste a response but rather put forward an argument with supporting facts.

ole sarg Loc: south florida

fill in the holes so that we can get a better picture. i do not look at the collapse as a party issue, but as a national issue. we the people got screwed not we the democrats or republicans.

PNagy Loc: Missouri City, Texas

You are 100% right. The downward spiral began in 1999 when a Republican Congress and Clinton repealed the Glass Steagall Act. The purported purpose of this was to serve us better. The real purpose was to allow corporate executives to loot the corporations based on irresponsible activities listed as unequivocal profits. When the intended bankruptcy was attained, the bailouts began. This is stealing from the poor to give to the rich. Don't call it class warfare, however, because that makes you as loony as a "conspiracy theorist."

Rathyatra Loc: Southport, United Kingdom

And another: " the most important attribute any politician can have is sincerity - if they can fake that they have it made "

RMM Loc: Suburban New York

Good one. Who's the source?

Phreedom Loc: Kitchener, Ontario, Canada

It appears that the quote has evolved over the years to suit the situation: http://quoteinvestigator.com/2011/12/05/fake-honesty/
I personally suspect its beginnings lie (oops!) in politics.

RMM Loc: Suburban New York

Along with so much else! :)

RMM Loc: Suburban New York

Along with so much else! :)

Blurryeyed Loc: NC Mountains.

Sarge…..

It is interesting to me that you make the argument that many conservatives have made against Bush, that he was in fact a progressive in conservative clothing. You will get no argument from me that both Presidents Bush and Clinton used provisions under the Community Reinvestment Act to expand homeownership in this country, and that they both targeted expanding homeownership for those in our society who would without federal involvement and regulation of the lending industry targeted at facilitating lending to lower income families would have had difficulty purchasing homes based on historical lending guidelines. How did this all start anyway? In the beginning the CRA was a legitimate response to illegitimate regulation in the first place. The CRA was a response to redlining, a practice that originated with Federal regulators and not private industry where certain geographical areas were simply deemed not worthy of the same loan evaluations that would be given to other areas. Plainly speaking if you lived in one of these areas that was redlined your geographical location would carry more weight in evaluating your loan application and terms than would be your personal or business credit rating. As defined by the Chicago Encyclopedia “Redlining is the practice of arbitrarily denying or limiting financial services to specific neighborhoods, generally because its residents are people of color or are poor. While discriminatory practices existed in the banking and insurance industries well before the 1930s, the New Deal's Home Owners' Loan Corporation (HOLC) instituted a redlining policy by developing color-coded maps of American cities that used racial criteria to categorize lending and insurance risks. New, affluent, racially homogeneous housing areas received green lines while black and poor white neighborhoods were often circumscribed by red lines denoting their undesirability.” There were three acts of congress that were passed to try and deal with this discriminatory policy, The Fair Housing Act of 1968 prohibited housing discrimination and the Home Mortgage Disclosure Act of 1975 required the release of data on bank lending, and finally the Community Reinvestment Act of 1977

Although the CRA has been around since the 70’s and had served to mitigate Redlining, the issue previously described, the law had pretty much served that purpose and sat dormant until the 90’s, both the Clinton and Bush administrations used the regulatory provisions of the CRA to expand lending practices to lower income and disadvantaged families, this was done so with the blessings of congress. Banks were monitored for such lending and if they did not meet quotas set by the regulators they would be denied access to various federal programs which they benefited from. Pressure was put onto banks to make loans that they may have otherwise avoided. This is not to say that it did not take long for the banks to find methods to securitize these subprime mortgages and sell them to unsuspecting investors, or in cases where they became purchasers of the same find ways to have their risk underwritten by the likes of AIG who also became caught up into the scandal.

For you to deny the role that the democrats played in the scandal is either because you have only used bias sources for your information or because you are willfully trying to be misleading. Although you try to highlight Frank’s comments in 2004 warning of the dangers of Bush’s goals and the regulations coming down from HUD to advance minority ownership. You highlight Frank’s efforts in rental housing and subsidy which if you are honest you will recognize is yet just another federal entitlement program, and although in this case it would have proven to be less costly to the nation than was the program of home ownership pursued by both presidents Bush and Clinton, Franks words and responses where somewhat political as well. During the 2004 congressional hearings in which a republican congress sought to review and regulate the GSE’s Fannie and Freddy Frank vehemently opposed any such review and regulation. He and his fellow democrats blocked the republican efforts while defending the practices occurring at Fannie and Freddie that ultimately resulted in the disgrace and prosecution of Franklin Raines. If Frank truly shared in his concerns then why did he oppose congressional reform and intervention as evidenced by this video of 2004 congressional hearings? Please excuse the intro but the rest of the video is serious and does present questions that beg to be answered.

http://www.youtube.com/watch?v=BzCG80Wz4mg

Bush may have been convinced that he was doing the right thing, others in his party also had concerns… Why did Frank not join with the republicans in their reform efforts? Anything that Frank did and said after 2006 is un useful in this discussion as to those connected in the crisis it was clear that the wheels were coming off the wagon.

You do highlight the increased purchasing of Fannie and Freddie of subprime mortgages that occurred under both administrations so there is no need to repeat that here other than to note that it illustrates even further that this was a bipartisan effort, and you surprised me by not bringing Glass-Steagall into the conversation as that is usually a favorite talking point of democrats thinking that they can point to a republican dismantling of regulations that they say would have prevented the collapse. This of course is not true on a number of levels and I will only point out a few. One is that the bill that repealed Glass-Steagall won bipartisan support as evidenced by the voting record in both house and Senate and then was signed by a democratic president in Clinton.

From Wikipedia,
“The bill then moved to a joint conference committee to work out the differences between the Senate and House versions. Democrats agreed to support the bill after Republicans agreed to strengthen provisions of the anti-redlining Community Reinvestment Act and address certain privacy concerns; the conference committee then finished its work by the beginning of November.[9][12] On November 4, the final bill resolving the differences was passed by the Senate 90-8,[13][note 4] and by the House 362-57.[14][note 5]" The legislation was signed into law by President Bill Clinton on November 12, 1999”

President Clintons recent comments regarding the repeal “When president Clinton was asked if he regretted signing the bill his response was “No, because it wasn’t complete deregulation at all, I don’t see that signing that bill has anything to do with the current crisis, Indeed, one of the things that hs helped stabilize the current situation as much as it has is the purchase of Merrill Lynch by Bank of America which was much smoother than it would have been if I hadn’t signed that bill.”

Hal81 Loc: Bucks County, Pa.

You must have not read all my post or you would know I dont trust the Reps any more than I do the Dems. And why would you stick up for the likes of Clinton? Even Atilla the hund must have done somthing good at one time in his life but that dont mean he wasn't a no good bas--d. Maby if you want to look the other way when these guys step out of line so be it. But not me. If they are no good they are no good to be in public office. I voted for a lot of people that I later regreted. I voted for Kennedy belive it or not. What a mistake trhat was. And for Bush That was another mistake. I think we need another party. One that is for the people all the people. The rich the poor and all us inbetween. Im sick of these guys taken bribes from the lobbyest and turning around and voteing for their intrest and not ours. If you still want to be sucked into their rederic so be it. Im 82 and probley never see it come to pass in my time but maby some day the people will wise up to being taken for a ride by both partys. I didn't mean to go after you, but just for sticking up for these bums. Both sides are getting us into such a deep hole it will take for ever to get out.

Hal81 Loc: Bucks County, Pa.

If you want to know who im voteing for in november its nobody. Im voteing aganst whoever is in office fron now on. And that goes for both sides. I cant see any one that has our intrest at heart. If the republicans win ill vote aganst in the next elction and so on down the line as long as im still around. If I take after my grandfather, he died two months short fo his 101st birthday ill be around a long time so get used to me.