| Timmah! said: Here's one thing that helped in large part to cause this mess: Sept 30, 1999 "Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits." ''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.'' ''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.'' "Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent."
The seeds of this were sown during the Clinton years. Anybody who tries to deny this is fooling themselves. |
IT WAS! And we saw lots of profit from that. Our country prospered for years, but that isn't the issue. The issue is not regulating mortgage-backed assets AT ALL. These companies make their own terms, apply their own value, then disperse these assets as if mortgage was reliable. Giving more money to more people isn't the issue. Mortgage backed assets are the issue.
Sure without mortgage backed assets there would never have been nearly as many loans, but the rating, distribution, and percentage of assets distributed with subprime ratings was what caused the crash. Percentages of CDO's issued with subprime ratings went from 6% in 1994 to nearly 70% in 2006. No one can know that except the companies investing in them, yet as the rules stand the SEC can intervene on a "voluntary basis only". Giving crooks the option of whether the police can stop by or not is stupid, isn't it?
