Critics say such programs led to the mortgage meltdown that prompted last month’s government takeover of Fannie Mae and its financial cousin, Freddie Mac. The giant firms are blamed for spreading bad mortgages throughout the private financial sector.
Although Frank now blames Republicans for the failure of Fannie and Freddie, he spent years blocking GOP lawmakers from imposing tougher regulations on the mortgage giants. In 1991, the year Moses was hired by Fannie, the Boston Globe reported that Frank pushed the agency to loosen regulations on mortgages for two- and three-family homes, even though they were defaulting at twice and five times the rate of single homes, respectively.
Three years later, President Clinton’s Department of Housing and Urban Development tried to impose a new regulation on Fannie, but was thwarted by Frank. Clinton now blames such Democrats for planting the seeds of today’s economic crisis.
Answer by gemgem at 8:05 AM on Feb. 24, 2009
Answer by LoriKeet at 8:10 AM on Feb. 24, 2009
Answer by gemgem at 8:11 AM on Feb. 24, 2009
gemgem, some banks were forced to give those loans with "quotas" of loans otherwise Acorn, ACLU, NAACP were accusing them of being racist and not investing in "communities of color".
Before they knew it, many banks were told to increase other ethnic and minority quotas, certain urban areas, then certain depressed rural areas... It domino effected into a horrible economic disaster. Then add the greedy flippers, and real estate agents who encouraged people to get ARM and Interest Only loans and before you know it, people got in over their head.
Answer by Anonymous at 8:14 AM on Feb. 24, 2009
It's like the perfect storm, we had exactly the right people in place at exactly the right time for greed and corruption to come to a major boiling point. Clinton insists he has no blame in this, and those that are informed know better, he had a major hand in this "crisis". Forcing a private sector bank to do business with people that were not qualified was just incredibly stupid. Having loans given to people who simply could not afford them, and people agreeing to buy them was the perfect recipe for disaster, now we get to pay up the balances to make everything better to the tune of what? 75 B is it? for mortgage relief. The responsible middle class now gets to pay two mortgages, theirs and their neighbors while getting a tax break for only one.
And Dodd is still enjoying his low mortgage rates.
Answer by akinbottom2 at 8:50 AM on Feb. 24, 2009
And yet somehow this was George Bush's fault.....hmmmm
Answer by momof030404 at 9:22 AM on Feb. 24, 2009
Answer by grlygrlz2 at 9:50 AM on Feb. 24, 2009
Answer by itsmesteph11 at 10:07 AM on Feb. 24, 2009
Answer by mustbeGRACE at 10:31 AM on Feb. 24, 2009
O.k see, this is exactly what I was trying to say in another post yesterday. This whole mess should have been stopped a long time ago and no one did a thing to stop it. I got yelled at for living in the past because I said it's funny how people are whining now that it's their problem when they should have made more noise before this mess got out of control. It goes beyond Bush and yes, Clinton is as much responsible for it as anyone is.
Answer by Anonymous at 10:52 AM on Feb. 24, 2009