Housing Mess Started With Bill Clinton In 1999

[firstdown]

Well for all of you blaming Bush for this mess look to your hero Bill Clinton who passed new lending laws in 1999.


Hot Air » Blog Archive » A great example of how we got to the credit-market meltdown

[djnemo65]

This article makes a lot of murky claims. Not a lot of hard analysis, so why don't you do us a favor and sum the argument up in your own words...

[redsk1]

Good thread. I've said this loud and clear in another post that those who want to place blame SOLELY on the Bush Administration have to look a little deeper. I'm not placing blame in one place or another but our situations root's are much deeper, than just saying it's Bush's fault.

Clinton was on the Today show and spoke about this bill the other day. He really just said that at the time it seemed like the right thing to do.

Again, there are a lot of factors here not just Clinton/Bush.

[MTK]

I can't wait for 8 years from now when we can just toss all the blame for whatever is going on back to W.

[drew54]

Originally Posted by Mattyk72

I can't wait for 8 years from now when we can just toss all the blame for whatever is going on back to W.

Duh, its always the person at fault that the media wants you to believe.

So it will be Obama's fault if he wins, or Bush's fault if McCain wins.

[Sheriff Gonna Getcha]

Originally Posted by firstdown

Well for all of you blaming Bush for this mess look to your hero Bill Clinton who passed new lending laws in 1999.


Hot Air » Blog Archive » A great example of how we got to the credit-market meltdown

First, Clinton didn't pass any new laws. The Constitution does not permit the President to pass any legislation. Moreover, the Community Reinvestment Act was enacted in 1977, not 1999.

Second, the collapse of the housing market cannot be attributed to minorities becoming home owners. The CRA was designed to benefit low income areas, which includes inner cities and rural areas (predominantly white areas). Moreover, banks were making money hand over fist on those sub-prime loans. As long as home prices kept skyrocketing, the banks were reaping huge rewards and not incurring many risks. The CEOs running those lending institutions knew the market could collapse, but they were far more concerned with making great profits on a quarterly basis.

[redsk1]

Originally Posted by Mattyk72

I can't wait for 8 years from now when we can just toss all the blame for whatever is going on back to W.

Is it just that you hate Bush that much and want to place blame on him w/out looking at the roots of a problem? Not saying he's not exempt from some criticism.

Investor's Business Daily: Congress Pushed Fannie, Freddie In Wrong Direction During 1990s

Congress Eases Lending Rules
In 1994, the Democratic Congress again moved, passing the Community Reinvestment Act — an update of the original 1977 law.
For the first time, homeowners that previously didn't qualify — either because they couldn't put any money down or had bad credit — were made eligible for government-backed loans.
The housing boom was on.
During the 1990s, according to one Fed study, Fannie and Freddie enjoyed a subsidy of as much as $182 billion, with most of that going to shareholders — not to poor borrowers, as supporters of the government-sponsored enterprises have often claimed.
Still, even after the GOP won control of Congress in 1995, Democrats in both houses worked with President Clinton as Fannie and Freddie's enablers.
Clinton, bypassing Republicans in Congress, had HUD rewrite the rules for Fannie and Freddie to let them get involved in the subprime market for the first time.
Robert Rubin's Treasury got involved too, reworking its own rules to crack down on banks that didn't make enough loans to distressed, minority neighborhoods.
That year, Fannie Mae bought an estimated $18.6 billion in subprime loans from banks. By 2004, that amount had exploded to $175 billion, or 44% of the total.
Republicans controlled Congress from 1995 through 2006. But under Clinton their hold was precarious, and with the Internet boom on and several foreign financial crises to deal with, Fannie and Freddie got lost in the shuffle.
Too Little, Too Late
At the tail end of Clinton's administration, Treasury officials under the new secretary, Lawrence Summers, became alarmed at Fannie and Freddie's excesses.
Undersecretary Gary Gensler went to Congress in 2000 seeking an end to the companies' special status — especially the "implicit" federal guarantee of their now-$5.4 trillion loan portfolio — and more power for regulators to boost the companies' capital requirements.
Democrats raised a ruckus. So did Fannie and Freddie, which were both headed by politically well-connected CEOs who knew how to strategically reward — and punish — those who crossed them.
"We think that the statements evidence a contempt for the nation's housing and mortgage markets," Freddie Mac spokeswoman Sharon McHale said at the time, summing up the sentiment in Congress.
It was the last chance during the Clinton era for anything like real reform.
Click here for copyright permissions!
Copyright 2000-2008 Investor's Business Daily, Inc.

[FRPLG]

I think we can confidently blame the whole mess on just about anyone.

[firstdown]

Originally Posted by Sheriff Gonna Getcha

First, Clinton didn't pass any new laws. The Constitution does not permit the President to pass any legislation. Moreover, the Community Reinvestment Act was enacted in 1977, not 1999.

Second, the collapse of the housing market cannot be attributed to minorities becoming home owners. The CRA was designed to benefit low income areas, which includes inner cities and rural areas (predominantly white areas). Moreover, banks were making money hand over fist on those sub-prime loans. As long as home prices kept skyrocketing, the banks were reaping huge rewards and not incurring many risks. The CEOs running those lending institutions knew the market could collapse, but they were far more concerned with making great profits on a quarterly basis.

The reason the CEO's where making all those loans is because a bill was passed in the 1990's allowing banks to sell these loans so they could get off the loan without all the risk involved. Fed & Fan ended up holding the notes to these loans and the rest is history. I know Clinton did not creat all of this on his own I was just making the point that it goes way back and everyone involved shares the blame. I also know Clinton cannot make laws but he got the mandate passed (which he signed) to force lenders to make allot of these bad loans. If you read the entire article the banks then came up with those Arm Loans so they could make these loans which was mandated that they do. All you have to do is type in Clinton and 1999 home loans and there is a bunch of stuff that changed in those years.

[MTK]

Originally Posted by redsk1

Is it just that you hate Bush that much and want to place blame on him w/out looking at the roots of a problem? Not saying he's not exempt from some criticism.

Investor's Business Daily: Congress Pushed Fannie, Freddie In Wrong Direction During 1990s

Congress Eases Lending Rules
In 1994, the Democratic Congress again moved, passing the Community Reinvestment Act — an update of the original 1977 law.
For the first time, homeowners that previously didn't qualify — either because they couldn't put any money down or had bad credit — were made eligible for government-backed loans.
The housing boom was on.
During the 1990s, according to one Fed study, Fannie and Freddie enjoyed a subsidy of as much as $182 billion, with most of that going to shareholders — not to poor borrowers, as supporters of the government-sponsored enterprises have often claimed.
Still, even after the GOP won control of Congress in 1995, Democrats in both houses worked with President Clinton as Fannie and Freddie's enablers.
Clinton, bypassing Republicans in Congress, had HUD rewrite the rules for Fannie and Freddie to let them get involved in the subprime market for the first time.
Robert Rubin's Treasury got involved too, reworking its own rules to crack down on banks that didn't make enough loans to distressed, minority neighborhoods.
That year, Fannie Mae bought an estimated $18.6 billion in subprime loans from banks. By 2004, that amount had exploded to $175 billion, or 44% of the total.
Republicans controlled Congress from 1995 through 2006. But under Clinton their hold was precarious, and with the Internet boom on and several foreign financial crises to deal with, Fannie and Freddie got lost in the shuffle.
Too Little, Too Late
At the tail end of Clinton's administration, Treasury officials under the new secretary, Lawrence Summers, became alarmed at Fannie and Freddie's excesses.
Undersecretary Gary Gensler went to Congress in 2000 seeking an end to the companies' special status — especially the "implicit" federal guarantee of their now-$5.4 trillion loan portfolio — and more power for regulators to boost the companies' capital requirements.
Democrats raised a ruckus. So did Fannie and Freddie, which were both headed by politically well-connected CEOs who knew how to strategically reward — and punish — those who crossed them.
"We think that the statements evidence a contempt for the nation's housing and mortgage markets," Freddie Mac spokeswoman Sharon McHale said at the time, summing up the sentiment in Congress.
It was the last chance during the Clinton era for anything like real reform.
Click here for copyright permissions!
Copyright 2000-2008 Investor's Business Daily, Inc.

I never said Bush is to blame, I just think it's funny that some people keep tossing it back on Clinton. We've been on W's watch for 8 years now, and if you listen to some people 9/11 was Clinton's fault, the current economy crisis was his fault... I mean c'mon, it's just ridiculous.

[firstdown]

Originally Posted by Mattyk72

I never said Bush is to blame, I just think it's funny that some people keep tossing it back on Clinton. We've been on W's watch for 8 years now, and if you listen to some people 9/11 was Clinton's fault, the current economy crisis was his fault... I mean c'mon, it's just ridiculous.

So if Obama takes office everything is going to be his fault?

[MTK]

Originally Posted by firstdown

So if Obama takes office everything is going to be his fault?

Once Obama is in he'll get a free ride with me. It's all on 'W' for the next 8 years.

[firstdown]

Originally Posted by Mattyk72

Once Obama is in he'll get a free ride with me. It's all on 'W' for the next 8 years.

Ok, I thought thats what you would say. LOL

[MTK]

I'm just kidding by the way. But in all seriousness, whoever the next President is will be inheriting quite the mess.

[12thMan]

Dude, I feel sorry for whomever inherits this. Obama will be greatly constrained to implement his healthcare policy because of this bailout.