Housing Debacle

7/11/09 Update:
Click here and read the report from the U.S. House of Representatives.
Or, click here and read the excerpts provided at Carpe Diem.

6/3/09 Update:
Click here to debunk Paul Krugman’s
false assertion that “Reagan Did It”.

2/16/09 Update:
Click here to completely debunk
EVERY argument from ALL the CRA deniers.

Click the image to enlarge it:
Click the image to enlarge it
Click here for the source of the image.

As the following videos and text demonstrate, overregulation, malfeasance, massive corruption and fraud on the part of Democrats were the primary causes of the current housing mess. At the root of it all is the Carter era 1977 Community Reinvestment Act.

Under Clinton, CRA related folly became a much bigger time bomb just waiting to explode. Click here to more fully understand how, in 1999, Clinton shifted to the tax payers all moral hazard associated with any subprime loan.

Obama is now at the white hot center of why this housing mess was not stopped. Click here for additional evidence implicating Obama.

The fallacy behind the original alleged intention of the CRA is explained in the text which follows the videos.

Additional regulation might have prevented this mess. Republicans attempted that. But, as the following videos and the text prove, Democrats blocked those efforts.

The best solution, as always, would have been to avoid the original overregulation (along with the inevitable fraud and corruption) in the first place.

Speaking of fraud and corruption, Fannie Mae and Freddie Mac, which have been described as “a kind of jobs program for out-of-work Democrats”, played a critical role in facilitating the Clinton “enhancements” to the CRA. They also provided lots of money to lots of Democrats (giving lots of Democrats lots of reasons to block reforms).

The following is a very brief
introduction to the pertinent facts
surrounding our housing mess:

The above video describes a $200 Billion bailout for Fannie & Freddie.
That bailout was expanded to $400 Billion.
Later, it was declared to be an UNLIMITED bailout!
Yet, the $170 Billion AIG bailout is all the media are interested in!

The following is an excellent
10 minute warp speed summary.
(Click here if the video is not visible.)

Click here to review sources for almost
every assertion made in the above video.

Note: The above link will open a new browser instance so you
can pause the video and go check that page for substantiations.

Even Bill Clinton knows who is to blame
(as he acknowledges at the end of this damning video):

Let’s let Bill Clinton say that one more time:

New video as of 7/3/09.
Hat tip to Vulcan’s Hammer:

Why did you have to learn this from a citizen’s blog?
This journalist knows why.
If you find that outrageous, SPEAK UP!
But, for now, dig deeper.

The CRA also gave ACORN the legal authority to conduct what some would call extortion in the name of so-called “affordable housing”.

This dysfunctional “family” consisting of the CRA, ACORN, Fannie, Freddie and key Democrats directly caused the current housing mess. But, this “family” is not merely dysfunctional. Reuters reports that Fannie and Freddie are being investigated by the FBI for fraud. CNN and others report that ACORN is being investigated by the FBI for voter fraud.

McCain and Bush both saw this housing mess coming and tried to stop it. But, lacking 60 Senators, the Republicans were unable to overpower the obstructionist efforts of the Democrats who were taking (and making) piles of cash from Fannie and Freddie. Without 60 votes in the Senate, the Republicans could not even get the Senate to vote on the desperately needed reforms.

Click here to read what the CRA purports to accomplish.

The CRA was bolstered by “a widely publicized 1990 Federal Reserve Bank of Boston finding that blacks and Hispanics suffered higher mortgage-denial rates than whites, even at similar income levels”.

It was preposterous on its face to presume that lenders were more interested in pursuing a racial agenda than in making a buck on a mutually beneficial loan. Never mind common sense, that Boston Fed study has since been repeatedly proven to have been inaccurate on the academic level as well.

As one of many examples, this 1996 study concludes:

“most, if not all, statistical evidence of racial redlining based on aggregate loan data is at best inconclusive, and more likely, misleading.”
What the CRA really does is requires mortgage lenders, through force of law, to meet government mandated quotas for handing out bad loans (aka subprime loans). If lenders fail to meet those quotas, there are penalties. In an era of mergers and acquisitions, the “penalties” often meant going out of business (see page 11 of this document). But, meeting these government mandated quotas ALSO often meant going out of business (both during the S&L Crisis of the late 1980’s and 1990’s as well as the current mess).

Click here to review all the posts which substantiate
and expand upon all of my observations above.

Click here for a timeline of government intrusion.

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