[This one's for 'CHUCK' {CL}...]
Fannie Mae and Freddie Mac were the chief culprits in the housing crisis because they encouraged people who could not afford payments to borrow money, according to a congressional report released Tuesday.
The claims in the report have long been advanced by conservatives, who argue that the Community Reinvestment Act and other federal programs fed the housing bubble that burst in 2007 and led to the economic downfall in 2008.
But the report explains in detail how Fannie and Freddie -- government sponsored enterprises (GSE) that were not subject to the same oversight as other publicly traded firms -- “privatized their profits but socialized their risks.” [after being empowered to do so by the {government's} CRA]
“This government intervention's ultimate effect was to create a mortgage tsunami that wrought devastation on the American people and economy,” ... “While government intervention was not the sole cause of the financial crisis, its role was significant and has received too little attention.”
Rep. Darrell Issa (R-Calif.), the ranking member on the House Oversight and Government Affairs Committee, said Tuesday in a speech at the Heritage Foundation;
“That is the perfect smoking gun that tells how Barney Frank [D-Mass.], the Clinton administration and others would do it in those days,” ... “The seeds of the meltdown began with the well-intentioned goal that everyone have a home even if they can’t afford it,” ... “It led to one of the biggest ponzi schemes ever.”
The report comes after Rep. Barney Frank (D-Mass.) – who fought against regulation of the two quasi-public mortgage giants -- and Rep. Anthony Weiner (D-N.Y.) wrote a letter in June to Fannie Mae and Freddie Mac calling on the GSEs to lower lending standards.The report also cites Frank’s accusations that to blame Fannie and Freddie is to blame only the lender and not the borrower...
READ MORE
FLASHBACKs >
- Yes, It Was Government Regulation That Caused Our Currrent Crisis
- GOVERNMENT POLICIES LED TO WALL STREET'S RISKY BUSINESS
- What is the cause for the current recession?
- The True Origins of This Financial Crisis
- How A Rule Rewrite Made Subprime Crisis Inevitable
- Congressional Problem Creation
- NYT obscures blame for financial crisis
[ok, so that last one isn't news... ]
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