Thursday, September 18, 2008

Democrats blocked Bush’s Fannie Mae and Freddie Mac Reforms

After the bailout of Fannie Mae and Freddie Mac, and now AIG, everyone is wondering whose next and what really caused this mess. A look back in history provides some answers as to how we got here and what do we do now. The government leaned hard on banks back in the 70's thru the 90's to help those deemed less fortunate attain the American dream of homeownership. Problem is the folks who were being left out also tended to have bad credit histories. Under the banner of fairness, the banks capitulated and created what has become today's sub prime loan market. The rate of homeownership did in fact increase significantly in the last 10-15 years with much of that increase coming in disadvantaged groups.

When Bush took office he attempted to reform Fannie Mae and Freddie Mac to raise credit and down payment requirements because of the huge and growing risks the government would face in an economic downturn.

From the NEW YORK TIMES September 11, 2003:

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.


Democrats such as Representative Barney Frank of Massachusetts and Representative Melvin L. Watt, Democrat of North Carolina blocked reform.

From the NEW YORK TIMES September 11, 2003:

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, and the less we will see in terms of affordable housing.''

Representative Melvin L. Watt, Democrat of
North Carolina, agreed.

''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.


What actually caused the bank failures is the simple fact that home values are falling not rising. In a normal market where values are rising, banks don’t lose money on a failed loan because they get the house, which, with a rising value, is worth more than the loan.

The same thing happened in 1973, when energy costs doubled from the Arab oil embargo, banks failed, stocks fell, jobs where lost, home values fell.

Also see:
Democrats created Fannie Mae and Freddie Mac mess then stopped reforms.
Obama vs McCain, who is really more of the same?
Economic and Energy crisis, the real 3 a.m. call for Obama and McCain.

39 comments:

Anonymous said...

You mean the Republicans controlled both houses and they were unable to get any legislation passed? How many speeches did Bush make to the public about this? Which Republicans were fighting for this legislation? How many speeches did they give about it? Did they work to get this out to their constituents? Essentially what you are saying is that it does not matter who the president is, he is powerless to get anything done. Then what's the point of voting for a Republican?

Ron said...

bryan really! Let's see if we can follow your logic. We should vote for the bad guys who created the problem, the democrats, because the republicans weren't strong enough to stand up agsinst them when they saw the abuse. So, since the good guys aren't strong enough to fight and win against the bad guys we should just vote for the bad guys.

Ok, look we can do better. Let's help the good guys win by voting for those individuals who did try to fight the bad guys. I'd say that was John McCain.

Bobby Revell said...

I am an Independent and not a fan of either party. Also, I have never liked Bush; however, I must give credit where credit is due. Bush di try to do something about Fannie & Freddie TWICE and it REALLY WAS shot down by the democrats. Everyone knows the democrats will vote opposite of the republicans simply because of partisan bias.

Bush tried will real congressional bills. The democrats caused this financial crisis starting with Bill Clinton. Now, we're going to get a Marxist, Barack Obama, as our president.

Sure the Iraq war was a mistake, but it's small potatoes compared to our financial crisis.

Gold Guide for World of Warcraft said...

good post :)

Anonymous said...

出会い豊島区出会い北区出会い荒川区出会い板橋区出会い練馬区出会い足立区出会い葛飾区出会い江戸川区ニキビCholesterol水虫冷え性むくみ産後わきが車買取転職加齢臭

business process management consultant said...

I'm glad you're back to posting. I love reading about your shopping adventures and great finds. Your outfits are always super cute too! Very inspirational. Please come visit my site business process management softwareswhen you got time.

time management stress said...

Such interesting read and information, thanks for sharing this post. I will check back to read your other new posts. Please come visit my site time management tips when you got time.

tree service said...

Thanks for posting, definitely going to subscribe! See you on my reader. Please come visit my site landscape give me any valuable feedbacks.

floor tile said...

Hello, What enticed you to post this article. It was extremely interesting, especially since I was searching for info on this subject last Thursday. Please come visit my site carpet when you got time.

louis said...

I didn't ever like bush because this all financial crisis started with republicans and now i am gonna support Obama as our next President.

cosmetic dentists edinburgh

Fashion Industry Search Engine said...

Hello, What enticed you to post this article. It was extremely interesting, especially since I was searching for info on this subject last Thursday. Please come visit my site Fashion Directory when you got time.

Fashion Style Blog said...

I really liked your post on home financing! if you have more information elsewhere let me know. Please come visit my site Fashion Blogs when you got time.

Dentists said...

Every good blog has two features, they have a very good topic and you see lot of good comments. Its blogging that has made me know new things everyday. I absolutely sure that people in this world have come closer in their personal world. There so many things working for a blog and the topic. Its just a flat world now because of blogs like this one, I appreciate it. Invisalign Birmingham | Dental implants birmingham | Dentists

resource said...

Your summaries are always top-notch. Thanks for keeping us apprised. I’m reading every word here.


Lethbridge Business Directory, Lethbridge Agriculture, fishing & Forestry, Lethbridge Apparel & Accessories, business directory listings of Lethbridge Automotive, Lethbridge Business & Professional Services, Lethbridge Computers, Communications & Electronics, home garden furnishing, real estate business finderLethbridge Construction & Renovation, Lethbridge Education, Lethbridge Entertainment & Media, Lethbridge Family & Community, Lawyers Attorneys & Law Firms Directory Lethbridge Finance & Legal,dinning restaurants Entertainment serving Lethbridge Food & Beverages, Lethbridge Health & Medicine Doctors Hospitals, Lethbridge Home & Garden, Lethbridge Industrial supplies & services , Lethbridge Personal Care, Lethbridge Public utilities & environment, Lethbridge Real-Estate & Insurance, Lethbridge Shopping & Specialty Stores, shopping, retail, department stores company guide of Lethbridge Sports & Recreation, Lethbridge Transportation, Lethbridge Travel & Lodging

Chatham Ontario Telephone Directory said...

If you had some way of rating posts I would for sure give you a high rating my friend!
Chatham Business Directory, Chatham Agriculture, fishing & Forestry, Chatham Apparel & Accessories, business directory listings of Chatham Automotive, Chatham Business & Professional Services, Chatham Computers, Communications & Electronics, home garden furnishing, real estate business finderChatham Construction & Renovation, Chatham Education, Chatham Entertainment & Media, Chatham Family & Community, Lawyers Attorneys & Law Firms Directory Chatham Finance & Legal,dinning restaurants Entertainment serving Chatham Food & Beverages, Chatham Health & Medicine Doctors Hospitals, Chatham Home & Garden, Chatham Industrial supplies & services , Chatham Personal Care, Chatham Public utilities & environment, Chatham Real-Estate & Insurance, Chatham Shopping & Specialty Stores, shopping, retail, department stores company guide of Chatham Sports & Recreation, Chatham Transportation, Chatham Travel & Lodging

Idaho Criminal Defense Lawyer said...

Your summaries are always top-notch. Thanks for keeping us apprised. I’m reading every word here.
State of Idaho Lawyer Directory,
Idaho Attorney Search,
Idaho Lawyers Search, Find
A Idaho Attorney Lawyers
, Idaho Civil Law Attorneys, Idaho Collection Law Attorneys, Idaho Computers & Technology Law Attorneys, Idaho Constitutional Law Attorneys, Idaho Construction Law Attorneys, Idaho Consumer Protection Attorneys, Idaho Domestic Partnerships Attorneys, Idaho Drug Charges Attorneys, Idaho DUI/DWI Attorneys, Idaho Education Law Attorneys, Idaho Elder Law Attorneys, Idaho Land Use & Zoning Attorneys, Idaho Landlord & Tenant Law Attorneys, Idaho Legal Information Services, Idaho Legal Services, Idaho Trial Attorneys, Idaho Vehicular Accident Attorneys, Idaho Whistleblower Attorneys, Idaho Workers&#; Compensation Attorneys, Idaho Wrongful Death Attorneys, Idaho Wrongful Termination Attorneys

Attorneys In Hawaii said...

If you had some way of rating posts I would for sure give you a high rating my friend!
Los
Angeles Divorce Lawyer
, Dallas
Divorce Lawyer
, Chicago
Divorce Lawyer
, Austin
Divorce Lawyer
, Houston
Divorce Lawyer
, fashion
wholesalers
, china
exports

Attorneys In Idaho said...

Your summaries are always top-notch. Thanks for keeping us apprised. I’m reading every word here.
wholesale
business
, Baltimore Dwi Lawyer, Chicago
Legal Clinic
, San
Francisco Dwi Lawyer
, Los
Angeles Dwi Lawyer
, Dallas
Dwi Lawyer
, Chicago
Dwi Lawyer
, Austin
Dwi Lawyer

CV.AGUS BUANA PUTRA said...

yes that's the economic conditions now
OCTOBER FALL Ι BALI ISLAND

Unknown said...

What a great post, I actually found it very thought provoking, you just never know sometimes when a golden nugget of information is going to land at your feet, thanks
New Jersey mutual fund insurance, New Mexico mutual fund insurance, New York mutual fund insurance, North Carolina mutual fund insurance, North Dakota mutual fund insurance, Ohio mutual fund insurance, Oklahoma mutual fund insurance, Oregon mutual fund insurance, Pennsylvania mutual fund insurance, Rhode Island mutual fund insurance, South Carolina mutual fund insurance,

Unknown said...

A fantastic read….very literate and informative. Many thanks….what theme is this you are using and also, where is your RSS button ?

South Dakota mutual fund insurance, Tennessee mutual fund insurance, Texas mutual fund insurance, Utah mutual fund insurance, Vermont mutual fund insurance, Virginia mutual fund insurance, Washington mutual fund insurance, West Virginia mutual fund insurance, Wisconsin mutual fund insurance, Wyoming mutual fund insurance</

Unknown said...

Missouri insurance agencies and brokers. Missouri car insurance, home owner insurance, health insurance, life insurance and more.
Missouri
Accident & Health Insurance
, Missouri
Aircraft & Aviation Insurance
, Missouri
Auto Insurance
, Missouri
Bail Bonds Referral Services
, Missouri
Boat & Yacht Insurance
, Missouri
Business Insurance
, Missouri
Business Interruption Insurance
, Missouri
Casualty insurance
, Missouri
Churches Insurance
, Missouri
Contents insurance
, Missouri
Corporate Insurance Adjusters
, Missouri
Credit Insurance
, Missouri
Crime insurance
, Missouri
Dental Insurance

Future Metals said...

This is good information to know about Republicans. But I wonder which Republicans were fighting for? What purpose of their fighting? in combat, there must be one right and one wrong. So just standing in the right side.
Grain Futures/Trading Silver/Crude Futures/Futures Investments

Unknown said...

Nice experience shared. Its not less than an interview. Great way of posting such good and informative stuff.
pet fish store, Wedding
Cake Supplies
, Cheap Car Rentals, pet food store, Bridal
Service
, Cheapest Car Rental, pet food stores, Bridal
Services

Unknown said...

found your site on del.icio.us today and really liked it.. i bookmarked it and will be back to check it out some more later ..
Car Lease Companies, Cosmetology
School  Beauty Schools
, Car
Lease Prices
, Beauty And Barber Schools  , Car
Rental Lease
, Beauty Schools And
Cosmetology Schools.
, Best Car
Leases

Anonymous said...

If you had some way of rating posts I would for sure give you a high rating my friend!
house security systerm China manufacturer, natural
herbal therapy
, wholesale
necklace
, China
Necklace Wholesale
, samsung security systerm China manufacturer, Wholesale Earrings Manufacturers, China
Bracelet Wholesale

Anonymous said...

Your summaries are always top-notch. Thanks for keeping us apprised. I’m reading every word here.
security systerm China manufacturers residential, wholesale
bracelet
, Wholesale Bracelet, , , wholesale
fashion earring
, Wholesale Bracelet Jewelry, , , earring
suppliers

combattery84 said...

HP Pavilion DV4000 Battery
HP Pavilion dv6000 Battery
HP Pavilion DV9000 Battery
HP F4098A battery
HP pavilion zx6000 battery
HP omnibook xe4400 battery
HP omnibook xe4500 battery
HP omnibook xe3 battery
Notebook NX9110 battery
IBM 02K6821 battery
IBM 02K7054 battery
IBM 08K8195 battery
IBM 08K8218 battery
IBM 92P1089 battery
IBM Thinkpad 390 Series battery
IBM Thinkpad 390X battery
IBM ThinkPad Z61m Battery
IBM 02K7018 Battery
IBM thinkpad t41p battery
IBM THINKPAD T42 Battery
IBM ThinkPad R60 Battery
IBM ThinkPad T60 Battery
IBM ThinkPad T41 Battery
IBM ThinkPad T43 Battery
IBM ThinkPad X40 Battery
Thinkpad x24 battery

combattery84 said...

HP Pavilion DV4000 Battery
HP Pavilion dv6000 Battery
HP Pavilion DV9000 Battery
HP F4098A battery
HP pavilion zx6000 battery
HP omnibook xe4400 battery
HP omnibook xe4500 battery
HP omnibook xe3 battery
Notebook NX9110 battery
IBM 02K6821 battery
IBM 02K7054 battery
IBM 08K8195 battery
IBM 08K8218 battery
IBM 92P1089 battery
IBM Thinkpad 390 Series battery
IBM Thinkpad 390X battery
IBM ThinkPad Z61m Battery
IBM 02K7018 Battery
IBM thinkpad t41p battery
IBM THINKPAD T42 Battery
IBM ThinkPad R60 Battery
IBM ThinkPad T60 Battery
IBM ThinkPad T41 Battery
IBM ThinkPad T43 Battery
IBM ThinkPad X40 Battery
Thinkpad x24 battery

combattery84 said...

Thinkpad x24 battery
ThinkPad G41 battery
IBM thinkpad r52 battery
Thinkpad x22 battery
IBM thinkpad t42 battery
IBM thinkpad r51 battery
Thinkpad r50 battery
IBM thinkpad r32 battery
Thinkpad x41 battery
SONY VGP-BPS2 Battery
SONY VGP-BPS2C Battery
SONY VGP-BPS5 battery
SONY VGP-BPL2C battery
SONY VGP-BPS2A battery
SONY VGP-BPS2B battery
SONY PCGA-BP1N battery


SONY PCGA-BP2E battery
SONY PCGA-BP2NX battery
SONY PCGA-BP2S battery
SONY PCGA-BP2SA battery
SONY PCGA-BP2T battery
SONY PCGA-BP2V battery
SONY PCGA-BP4V battery
SONY PCGA-BP71 battery
SONY PCGA-BP71A battery
SONY VGP-BPL1 battery

combattery84 said...

SONY VGP-BPL2 battery
Sony vgn-t2xp/s battery
Sony vaio vgn-s4xp battery
Sony vaio pcg-z1rsp battery
SONY NP-FT1 battery
SONY NP-FC10 Battery
SONY NP-F330 Battery
SONY NP-F550 Battery
SONY NP-FM50 Battery
SONY NP-FP50 Battery
SONY NP-55 Battery
SONY NP-FM70 Battery
SONY NP-33 Battery
SONY NP-F970 Battery
SONY NP-FP90 Battery
FUJITSU Lifebook C2220 battery
FUJITSU Fpcbp63 Battery
FUJITSU Fpcbp68 Battery
FUJITSU Fpcbp77 Battery
FUJITSU Fpcbp78 Battery
FUJITSU Fpcbp79 Battery
FUJITSU Fpcbp95 Battery
FUJITSU Fpcbp98 Battery
FUJITSU Fpcbp121 Battery
FUJITSU Fpcbp151 Battery
FUJITSU lifebook t4010 Battery
FUJITSU lifebook t4020d Battery
GATEWAY NX7000 battery
UNIWILL 258-4S4400-S1P1 Battery
TOSHIBA PA3307U-1BRS Battery
TOSHIBA PA3383U-1BRS Battery
TOSHIBA PA3384U-1BRS Battery

combattery84 said...

ACER Travelmate 4002lmi battery
Acer travelmate 800 battery
Acer aspire 3613wlmi battery
Travelmate 2414wlmi battery
Acer batcl50l battery
Acer Travelmate 2300 battery
ACER aspire 3610 battery
ACER travelmate 4600 battery
Dell Latitude D800 battery
Dell Inspiron 600m battery
Dell Inspiron 8100 Battery
Dell Y9943 battery
Dell Inspiron 1521 battery
Dell Inspiron 510m battery
Dell Latitude D500 battery
Dell Latitude D520 battery
Dell GD761 battery
Dell NF343 battery
Dell D5318 battery
Dell G5260 battery
Dell Inspiron 9200 battery
Dell Latitude C500 battery
Dell HD438 Battery
Dell GK479 battery
Dell PC764 battery
Dell KD476 Battery
Dell Inspiron 1150 battery
Dell inspiron 8500 battery

tekira said...

Article swoopo review

Angry birds flash said...

Thanks for the post. It was very interesting and meaningful. Keep posting. I follow you.
Clone Scripts| PHP Scripts|

xiaofen said...

Christian Louboutin Outlet Online shoe store is up for many years.A man who wants to play its expertise, it must fit the social environment needs. If you need from the social environment, their expertise will lose value. Therefore, we have according to community needs, determine their own actions, better to show themselves. Christian Louboutin Outlet Online shoes wear can make you look more beautiful, more attractive feet.

cicy said...

Thanks for sharing and letting us aware about this information. This is a great thread, so much info.
http://www.2joygame.com/WOW-News/World-of-Warcraft-female-player-feel-confusion-and-unabale-to-quit.html

http://www.wowbotsfree.com/tera-enjoys-large-popularity-in-japan-market/

http://cheaptera.blogspot.com/2011/09/tera-announced-first-closed-beta-test.html

QHYAPPLE said...

http://teraonlinesite.onsugar.com/Video-game-numbers-hardly-ever-dark-white-19229802

http://www.wowbotsfree.com/3d-game-analyst-28-of-the-players-deny-the-3ds-3d/

http://www.dnfonlines.com/asia-pacific-is-the-worlds-largest-social-networking-market/

http://www.tera2.org/index.php?load=read&id=4

http://www.diablokey.com/index.php?load=read&id=1

business gas prices said...

Anyone can comment on blog but main thing is that comment is meaningful. I think comment also increase the reader Inters about that blog which is most important.

http://www.xinix.co.uk/business-gas-electricity-price-tariffs-comparison/

Lehenga sarees said...

Superhero were amazing at Soul Survivor, the whole of my youth group really enjoyed them!