New York Times Article From September 30, 1999 Showcases Who Is Really Responsible For The Credit Crisis

Despite Barack Obama’s bold-faced lie about deregulation being the cause for the mortgage credit crisis, the New York Times, in an article published on September 30, 1999, reveals the truth about what happened and why.

We know that it all began with the 1977 Community Reinvestment Act which required banks and lenders to make risky loans to people who didn’t have the credit rating necessary to qualify for those loans.

But, as the NYT article illustrates, it was stepped up and taken to even further extremes. Now, we all know who was President in 1999, right? (Hint: it wasn’t a Republican.)

Here are some exceprts from that article:

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders. The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Did you read that? “Fannie Mae is easing credit requirements on loans that it will purchase from banks and other lenders.”

Now, why would they do that?

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 …

Yes, you read that correctly. “Under increasing pressure from the Clinton Administration.” This was also the time when Franklin Raines made millions off of Fannie Mae even though he knew it was heading for big trouble.

I wonder if Barack Obama knew about this before he told his bold-faced lie about Republicans being at fault for the credit crisis in his State of the Union Address last night?

More:

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980′s. “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.”

Again, more history that gets ignored by leftist politicians. It was the conservative American Enterprise Institute that saw the danger and the libs ignored it. And, everytime someone brought up the possibility that Freddie and Fannie would go under, it was libs who blocked any effort at reform.

Finally:

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

The push for making all of these subprime loans came first from the 1977 CRA (passed and signed into law by Democrats) and then later from the Clinton Administration.

Now, who is responsible for this economic crisis? (Hint: they were not Republicans.)

You can access the complete article on-line here:

Fannie Mae Eases Credit To Aid Mortgage Lending
Steven A. Holmes
New York Times
September 30, 1999

And just in case the New York Times decides to place this article into a memory hole, you can download it in .pdf format here:

Fannie Mae Eases Credit To Aid Mortgage Lending
Steven A. Holmes
New York Times
September 30, 1999

Obama And The Coming Collapse Of National Security

Dissident Dingo over at Resistance Day blog has penned a terrific essay about Barack Obama’s weakness on national security and what it will mean to us over the next four years.

Here are some excerpts:

Barack Obama will be tested on the national security front. The tests will not come only from the Islamic terrorists either. Russia, North Korea, Iran and the Chinese all smell weakness. They see an inexperienced, un-tested and immature President who seems to believe that the power of his personality will be enough to keep our enemies under control. He believes that the entire world is no different than the American media who love him. He is wrong, of course, but will he realize this when the test comes? … Obama will be tested and he will handle it badly. Biden knows this and his comments were a plea for the media to stay in the tank and support him…no matter what. Remember, Obama is “too big to fail”. Obama is “historic”. We cannot let the first affirmative action President be a mediocre one can we? As conservatives, we take the defense of our country seriously. National security is serious business and failure, in this day and age, means a lot of dead Americans. That is why we don’t vote for the likes of Obama. We do not vote for leftists who view national security (and all other Constitutional functions of government) as a waste of time and resources that should be used for liberal, unconstitutional functions of government. … Wasn’t it the misguided former Democrat Senator John Edwards who called the War on Terror a “bumper sticker”? No, John. “Hope” is a bumper sticker. The War on Terror was President Bush’s response to an ideology that has the declared objective of wiping us out. And they’re still out there. They’re weaker and they enjoy far less support from countries that they could once count on when the Clinton Administration was napping. But, they’re still committed.

This essay is very powerful and telling. I hope that all members of the Republican National Committee read it and that the GOP takes it heart in 2010.

You can access the complete column on-line here:

National Security And The Coming Barackalypse
Dissdent Dingo
Resistance Day Blog
January 23, 2009

It’s Time To Call The Democrats On Their Lies And Kill The Community Reinvestment Act

What caused the credit crisis that came to national attention in September of this year? Certainly a number of factors all contributed, just as a number of factors would ultimately contribute to the collapse of a bridge. But any such collapse can be traced back to a single defective component. For a bridge, it may be a lynch pin or a truss cross-member. For the credit markets, it is the Community Reinvestment Act of 1977 (CRA).

Investor’s Business Daily says this bluntly in their November 28th Editorial & Opinion piece. But they also expose the reasons why the Democrats want nothing to do with repealing the CRA or changing it in anyway. From their editorial:

The Community Reinvestment Act is to blame for the financial crisis, but it so powerfully serves Democrats’ interests that they’ll do anything to protect it — including revising history. The CRA coerces banks into making loans based on political correctness, and little else, to people who can’t afford them. Enforced like never before by the Clinton administration, the regulation destroyed credit standards across the mortgage industry, created the subprime market, and caused the housing bubble that has now burst and left us with the worst housing and banking crises since the Great Depression. The CRA should be abolished, along with the government-sponsored enterprises that fueled the secondary market for subprimes — under pressure from Clinton, who ordered HUD to set quotas for “affirmative action” lending at Fannie Mae and Freddie Mac. But powerful Democrats in Washington want to protect the act — along with Fannie and Freddie — and spin the subprime scandal as the result of too little regulation, not too much.

The Dems are repeating the lie that the subprime lending crisis was a result of de-regulation. That is simply not true and anyone with even the most basic understanding of economics can see this. The truth is that it was over-regulation that brought us to the current state of affairs.

More:

Repealing or weakening the CRA would be a mistake,” warns Senate Banking Committee Chairman Chris Dodd, D-Conn., who argues that the CRA should be strengthened. Dodd, the top recipient of Fannie donations and himself a beneficiary of a sweetheart mortgage brokered by a subprime lender, recently invited one of Clinton’s top enforcers of the CRA to testify. “The notion that CRA has caused this problem is a pernicious thought,” said former Comptroller of the Currency Gene Ludwig. “These are not truthful statements. The CRA has helped to create a better and sounder world for finance, not the opposite.” Dead wrong. But the mainstream media believe it, and have attacked those, including this paper, who dare to tell the truth about the crisis. Already the debacle has erased $13 trillion in wealth, while putting taxpayers on the hook for up to $8 trillion in bailouts.

Yep. Sen. Dodd sure makes aot of money off of this mess. It is pretty clear why he wants to keep the CRA in place as well as lie about what the CRA is really doing to the economy.

How many more lies are going to come out of the Democrats’ collective mouth before we voters see the truth and hold the libs accountable for what they are doing?

Here is the true history of the CRA mess versus the lies the Democrats are trying to get everyone to believe:

Fact: The 1977 law was only lightly enforced until Clinton added teeth to it in 1994 and launched an anti-redlining campaign against banks, led by Ludwig, Housing Secretary Henry Cisneros (and later Andrew Cuomo) and Attorney General Janet Reno that lasted into this decade. Minority homeownership rates, which had been flat, began a steep rise in 1995, and home prices soon followed, stoked by easier lending. Numerous bank officials complain that they still feel pressured by CRA regulators to make inner-city loans they know are at great risk of defaulting. Myth: The CRA could not have led to financial Armageddon, because the overwhelming share of subprime mortgages came from lenders that were not banks and not regulated by the CRA. Fact: Nearly 4 in 10 subprime loans between 2004 and 2007 were made by CRA-covered banks such as Washington Mutual and IndyMac. And that doesn’t include loans made by subprime lenders owned by banks, which were in effect covered by the CRA. … Myth: The CRA did not force anyone to do subprime loans or take excessive risks. Fact: Subprime loans were the vehicle banks used to satisfy CRA compliance, and Clinton and his regulators encouraged their use. Before Clinton took office, subprimes were virtually unheard of. By the time he left, they made up more than 9% of the market for mortgage originations. Today they’re 20%. … Myth: Greedy investment bankers, who securitized and sold subprime mortgages, drove us to the credit crisis, not government. Fact: Clinton’s regulatory policies led to the creation of this new risk on Wall Street. His CRA amendments created the subprime market, and only after he pressured Fannie and Freddie to socialize the risk and guarantee the profit from the subprime loans did Wall Street get involved in a big way.

Is somebody actually doing something about this? Yes. In the House of Representatives, there are two bills that address these problems. First, HR 7264 would repeal the CRA. Second, HR 7094 would dissolve Fannie Mae and Freddie Mac.

Write your Representatives and ask them to support these bills.

You can access the complete article on-line here:

Stop Covering Up And Kill The CRA
Investor’s Business Daily
November 28, 2008