May 6, 2010


Fannie and Freddie were the lynch pins in causing the mortgage meltdown, a disaster that was also a Democrat invention. The housing meltdown wasn't caused by deregulation. Or by Wall Street greed. It was the result of government interference.

I have been telling people for years now how and what caused this massive problem, and almost always with a look of WTF are you talking about, Bush caused this. No he didn't.

The Community Reinvestment Act (CRA) of 1977 is passed under Carter with pressure from groups like ACORN. It prohibts the practice of redlining - giving fewer loans to poor areas.

Sometime in the early 1990s home loan data was required to collect racial statistical data, used later to make the false case that minorities were being discriminated against in the loans market.

In 1995, Bill Clinton gave the CRA teeth. By the force of government, subprime loans were authorized specifically so that lower income minorities could buy homes without meeting the usual requirements.

Late in Clinton's second term he signed the Financial Services Modernization Act of 1999 and the Commodity Futures Modernization Act of 2000 that unleashed the GSEs of Fannie Mae and Freddie Mac.

Fannie Mae and Freddie Mac began buying subprime notes giving rise to entities like Countrywide that specialized in the practice.

Fannie and Freddie became bloated with bad loans, went bankrupt leading to the mortgage meltdown of 2008. The rest, as they say, is history.

An aside to the story is that Bush tried to reform Fannie and Freddie in 2002 to prevent exactly what was to happen in 2008, but was blocked by Congress in 2003. And again blocked 17 times by congress in 2008.


Anonymous said...

Hopefully as we get closer to summer this blog will return to being about Lakeside.

Just your under average blogger said...

Unless you start your own, I would'nt hold your breath, it aint going to happen.

What in the world could be said that hasn't already been said countless times?

Joey said...

it was never about Lakeside. It was about greed, lies and family mistrust.

Anonymous said...

Yes, and the topic of the partition has been covered ad naseum- but Lakeside is so magical and enchanting-- it would be nice to see some blog posts on it.

Just your under average blogger said...

Perhaps a member of Lakeside might want to take on that task.