David Weidner scarcely mentions the elephant in the room: sub-prime loans.
By Daniel at 23 June, 2009, 2:47 pm
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
In 1994 I was in real estate sales and attended a Clinton administration sponsored seminar as the administration rolled out their “carrot and stick” approach to putting more of the poor into their own home. This was to be the creation of sub-prime loans.
Stick: Bankers must loan to the less than credit worthy or the administration will use the Community Reinvestment Act (and ACORN) to bash them.
Carrot: Banks don’t have to worry about holding bad loans on their books, the administration will facilitate their sales to others as mortgage backed securities.
When Clinton took office there were zero dollars in sub-prime loans. By the time he left office there was over a Trillion dollars in sub-prime loans, in the hands of Fannie Mae and Freddie Mac alone.
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
No comments yet.