Only because the banks went bananas, thinking that they could abandon good lending practices and be guaranteed huge profits.
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Where is Trump's Beautiful Healthcare Plan? Here's Warren's...
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Into the Night
Verified User
Yep, Community Reinvestment Act...an act of a Democrat Congress and signed by a Democrat President.
The Democrats controlled Congress in 2006-2007, the year of the crash. The Supreme Court is irrelevant. The President is irrelevant. This is a problem of Congress and the Fed.
No. Democrats did.
Into the Night
Verified User
The Act was originally passed under the administration of Jimmy Carter (Democrat Congress). It was changed in 1989, 1991, 1992, 1994, 1995, 1999, 2005, 2007, and 2008.
It was the 1995 changes that eventually triggered the 2007 crash. You pointed out the mechanism yourself already. Yes...it took twelve years for the crash to occur. The other factor was the Fed keeping interest rates too low (price controls).
Into the Night
Verified User
Yup. As a direct result of the 1995 changes.
Into the Night
Verified User
The wealthy does care. They are the ones paying the most in her proposed taxes.
Into the Night
Verified User
Yup. A direct result of the 1995 changes to the act (under a Democrat Congress and Clinton). Took 'em twelve years of entangling themselves in cross bank loans resulting from these changes before it finally blew up on 'em.
The trigger was a drop in housing prices. The Pyramid scheme finally collapsed.
Some folks saw the writing on the wall and bet against the housing market. They won big in that crash.
gfm7175
Mega MAGA
As ITN said... Yes, they do care. There's been plenty of backlash from wealthy people (millionaires, etc.) to Warren's taxing and spending ideas...
Don't come @ me with right-wing shit about the Bush Economic Collapse being someone else's fault other than Bush.
Bush's own Working Group on Financial Markets laid the blame for the collapse on the deregulation of subprimes that started in 2004, not 1995:
“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”
https://www.treasury.gov/resource-center/fin-mkts/Documents/q4progress update.pdf
The Federal Reserve Board of Governors also laid the blame for the collapse on the poor performance of subprime loans issued between 2004-2007:
"Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "
https://www.federalreserve.gov/images/20081203_analysis.pdf
The subprime bubble exploded beginning in 2004, going from 10% of all new mortgages in 2002 up to 40% of all new mortgages by 2004, a 4x increase:
"Some 80 percent of outstanding U.S. mortgages are prime, while 14 percent are subprime and 6 percent fall into the near-prime category. These numbers, however, mask the explosive growth of nonprime mortgages. Subprime and near-prime loans shot up from 9 percent of newly originated securitized mortgages in 2001 to 40 percent in 2006."
https://www.dallasfed.org/~/media/documents/research/eclett/2007/el0711.pdf
And furthermore, it was Bush who tied his tax cut to the mortgage bubble, campaigning on that very thing in 2004:
Touting his tax cuts as the economy's savior — and pointing to the strong housing market as proof — Bush said "more people own their own home now than ever."
https://www.foxnews.com/story/bush-ties-policy-to-record-home-ownership
So Bush tied his tax cuts to the housing market...the same housing market that would crash just 3 years later.
Now why did Bush inflate a housing bubble? Because his shitty tax cuts failed to deliver on any of the promises made of them, and he needed to juice the economy ahead of the 2004 election. So he lowered lending standards for subprime to inflate a bubble to give the impression that the economy was growing as a result of his tax cuts, when it was really growing as a result of debt, both public and individual.
Bush's own Working Group on Financial Markets laid the blame for the collapse on the deregulation of subprimes that started in 2004, not 1995:
“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”
https://www.treasury.gov/resource-center/fin-mkts/Documents/q4progress update.pdf
The Federal Reserve Board of Governors also laid the blame for the collapse on the poor performance of subprime loans issued between 2004-2007:
"Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "
https://www.federalreserve.gov/images/20081203_analysis.pdf
The subprime bubble exploded beginning in 2004, going from 10% of all new mortgages in 2002 up to 40% of all new mortgages by 2004, a 4x increase:
"Some 80 percent of outstanding U.S. mortgages are prime, while 14 percent are subprime and 6 percent fall into the near-prime category. These numbers, however, mask the explosive growth of nonprime mortgages. Subprime and near-prime loans shot up from 9 percent of newly originated securitized mortgages in 2001 to 40 percent in 2006."
https://www.dallasfed.org/~/media/documents/research/eclett/2007/el0711.pdf
And furthermore, it was Bush who tied his tax cut to the mortgage bubble, campaigning on that very thing in 2004:
Touting his tax cuts as the economy's savior — and pointing to the strong housing market as proof — Bush said "more people own their own home now than ever."
https://www.foxnews.com/story/bush-ties-policy-to-record-home-ownership
So Bush tied his tax cuts to the housing market...the same housing market that would crash just 3 years later.
Now why did Bush inflate a housing bubble? Because his shitty tax cuts failed to deliver on any of the promises made of them, and he needed to juice the economy ahead of the 2004 election. So he lowered lending standards for subprime to inflate a bubble to give the impression that the economy was growing as a result of his tax cuts, when it was really growing as a result of debt, both public and individual.
Joe Capitalist
Racism is a disease
Bush drive for home ownership fueled housing bubble
WASHINGTON — "We can put light where there's darkness, and hope where there's despondency in this country. And part of it is working together as a nation to encourage folks to own their own home."
- President George W. Bush, Oct. 15, 2002
The global financial system was teetering on the edge of collapse when Bush and his economics team huddled in the Roosevelt Room of the White House for a briefing that, in the words of one participant, "scared the hell out of everybody."
It was Sept. 18. Lehman Brothers had just gone belly-up, overwhelmed by toxic mortgages. Bank of America had swallowed Merrill Lynch in a hastily arranged sale. Two days earlier, Bush had agreed to pump $85 billion into the failing insurance giant American International Group.
The president listened as Ben Bernanke, chairman of the Federal Reserve, laid out the latest terrifying news: The credit markets, gripped by panic, had frozen overnight, and banks were refusing to lend money.
Then his Treasury secretary, Henry Paulson Jr., told him that to stave off disaster, he would have to sign off on the biggest government bailout in history. Bush, according to several people in the room, paused for a single, stunned moment to take it all in.
"How," he wondered aloud, "did we get here?"
Eight years after arriving in Washington vowing to spread the dream of home ownership, Bush is leaving office, as he himself said recently, "faced with the prospect of a global meltdown" with roots in the housing sector he so ardently championed.
But the story of how the United States got here is solely one of Bush's own making, according to a review of his tenure that included interviews with dozens of current and former administration officials.
From his earliest days in office, Bush paired his belief that Americans do best when they own their own homes with his conviction that markets do best when left alone. Bush pushed hard to expand home ownership, especially among minority groups, an initiative that dovetailed with both his ambition to expand Republican appeal and the business interests of some of his biggest donors. But his housing policies and hands-off approach to regulation encouraged lax lending standards.
"There is no question we did not recognize the severity of the problems," said Al Hubbard, Bush's former chief economic adviser, who left the White House in December 2007.
And both Paulson and his predecessor, John Snow, say the housing push went too far.
"The Bush administration took a lot of pride that home ownership had reached historic highs," Snow said during an interview. "But what we forgot in the process was that it has to be done in the context of people being able to afford their house. We now realize there was a high cost."
Lawrence Lindsay, Bush's first chief economic adviser, said there was little impetus to raise alarms about the proliferation of easy credit that was helping Bush meet housing goals.
"No one wanted to stop that bubble," Lindsay said. "It would have conflicted with the president's own policies."
Today, millions of Americans are facing foreclosure, home ownership rates are virtually no higher than when Bush took office, Fannie and Freddie are in a government conservatorship, and the bailout cost to taxpayers could run in the trillions of dollars.
As the economy has shed jobs - 533,000 last month alone - and his party has been punished by irate voters, the weakened president has granted his Treasury secretary extraordinary leeway in managing the crisis.
In recent weeks Bush has shared his views of how the nation came to the brink of economic disaster. He cites corporate greed and market excesses fueled by a flood of foreign cash - "Wall Street got drunk," he has said - and the policies of past administrations. He blames Congress for failing to reform Fannie and Freddie.
Last week, Fox News asked Bush if he was worried about being the Herbert Hoover of the 21st century. "No," Bush replied. "I will be known as somebody who saw a problem and put the chips on the table to prevent the economy from collapsing."
Darrin West could not believe it. The president of the United States was standing in his living room. It was June 17, 2002, a day West recalls as "the highlight of my life." Bush, in Atlanta to introduce a plan to increase the number of minority homeowners by 5.5 million, was touring Park Place South, a development of starter homes in a neighborhood once marked by blight and crime.
"Part of economic security," Bush declared that day, "is owning your own home."
So Bush had to, in his words, "use the mighty muscle of the federal government" to meet his goal. He proposed affordable housing tax incentives. He insisted that Fannie Mae and Freddie Mac meet ambitious new goals for low-income lending.
Concerned that down payments were a barrier, Bush persuaded Congress to spend as much as $200 million a year to help first-time buyers with down payments and closing costs.
And he pushed to allow first-time buyers to qualify for government insured mortgages with no money down. Republican congressional leaders and some housing advocates balked, arguing that homeowners with no stake in their investments would be more prone to walk away, as West did. Many economic experts, including some in the White House, now share that view.
The president also leaned on mortgage brokers and lenders to devise their own innovations. "Corporate America," he said, "has a responsibility to work to make America a compassionate place."
And corporate America, eyeing a lucrative market, delivered in ways Bush might not have expected, with a proliferation of too-good-to-be-true teaser rates and interest-only loans that were sold to investors in a loosely regulated environment. But Bush populated the financial system's alphabet soup of oversight agencies with people who, like him, wanted fewer rules, not more.
The president's first chairman of the Securities and Exchange Commission promised a "kinder, gentler" agency. The second was pushed out amid industry complaints that he was too aggressive. Under its current leader, the agency failed to police the catastrophic decisions that toppled the investment bank Bear Stearns and contributed to the current crisis, according to a recent inspector general's report.
As for Bush's banking regulators, they once brandished a chain saw over a 9,000-page pile of regulations as they promised to ease burdens on the industry. When states tried to use consumer protection laws to crack down on predatory lending, the comptroller of the currency blocked the effort, asserting that states had no authority over national banks.
The administration won that fight at the Supreme Court. But Roy Cooper, North Carolina's attorney general, said, "They took 50 sheriffs off the beat at a time when lending was becoming the Wild West."
The president did push rules aimed at requiring lenders to explain loan terms more clearly. But the White House shelved them in 2004, after industry-friendly members of Congress threatened to block confirmation of his new housing secretary.
In the 2004 election cycle, mortgage bankers and brokers poured nearly $847,000 into Bush's re-election campaign, more than triple their contributions in 2000, according to the nonpartisan Center for Responsive Politics. The administration did not complete the new rules until last month.
Today, administration officials say there is substantial evidence to conclude that Bush's home ownership push backfired and it caused the 2008 Great Recession.
What was?
Joe Capitalist
Racism is a disease
(Trump dick sucker) EVERYTHING IS OBAMA'S FAULT
Into the Night
Verified User
Nope. The whole thing was set up in 1995.
They are wrong.
Of course they do. Blame anybody but themselves!
There was a change in 2005. It made no significant difference.
No, that happened in 2007-2008, after housing prices started dropping.
According to the Federal Reserve Board of Governors:
"Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "
https://www.federalreserve.gov/images/20081203_analysis.pdf
So Conservatives are liars when they blame the CRA for the subprime mortgage market that bubbled from 2004-2007.
"Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "
https://www.federalreserve.gov/images/20081203_analysis.pdf
So Conservatives are liars when they blame the CRA for the subprime mortgage market that bubbled from 2004-2007.
Seriously, don't @ me on this subject of the Bush Mortgage Bubble, Conservatives...you're not going to win this debate.
Bush the Dumber's own Working Group laid the blame for the collapse on the decline in lending standards for subprime loans beginning in 2004.
The Federal Reserve says that there were no changes to the CRA in 1995 that could have explained the 4x growth that happened 9 years later, because the crisis was rooted in the poor performance of sbprimes issued between 2004-2007.
Now why were subprimes issued from 2004-7 so shitty? Because Conservatives got their fingers on them and deregulated them, lowering the standards to inflate a housing bubble to make it look like the economy was growing as a result of tax cuts when it was really growing as a result of debt.
Bush the Dumber's own Working Group laid the blame for the collapse on the decline in lending standards for subprime loans beginning in 2004.
The Federal Reserve says that there were no changes to the CRA in 1995 that could have explained the 4x growth that happened 9 years later, because the crisis was rooted in the poor performance of sbprimes issued between 2004-2007.
Now why were subprimes issued from 2004-7 so shitty? Because Conservatives got their fingers on them and deregulated them, lowering the standards to inflate a housing bubble to make it look like the economy was growing as a result of tax cuts when it was really growing as a result of debt.
Not what happened at all. You're just making shit up as you go because you don't know shit about this subject, but are desperate to absolve your awful belief system of guilt.
What happened was that Bush lowered the standards for subprime lending in 2004, and as a result, subprime mortgages grew from 10% of new issues to 40% in just two years.
That has nothing to do with the CRA.
Furthermore, Clinton had imposed restrictions on GSE's in the year 2000 that prevented them from purchasing risky, subprime loans.
Bush reversed that restriction in 2003, and suddenly GSE's were buying risky subprimes because Bush told them to.
Wrong, wrong...FUCKING WRONG.
The trigger were defaults on subprime mortgages that started happening en masse in 2006, first, with the mortgages issued in 2004, and then followed by each subsequent year.
You'll notice that the subprimes issued from 2002 didn't see the same spike in delinquency. Why? BECAUSE THOSE SUBPRIMES HAD BETTER LENDING STANDARDS
View attachment 12475
At the time, Conservatives were saying there was no housing bubble.
Here's current Trump Economic Advisor, Larry "I've never been right about the economy in my life" Kudlow, dismissing bubble concerns in 2005:
The Housing Bears Are Wrong Again
June 20, 2005 2:40 PM
Homebuilders led the stock parade this week with a fantastic 11 percent gain. This is a group that hedge funds and bubbleheads love to hate. All the bond bears have been dead wrong in predicting sky-high mortgage rates. So have all the bubbleheads who expect housing-price crashes in Las Vegas or Naples, Florida, to bring down the consumer, the rest of the economy, and the entire stock market.
https://www.nationalreview.com/2005/06/housing-bears-are-wrong-again-larry-kudlow/
When the housing market crashed two years later, Las Vegas and Naples were two of the hardest-hit cities.
Joe Capitalist
Racism is a disease
Nope. The whole thing was set up in 1995.
They are wrong.
Of course they do. Blame anybody but themselves!
There was a change in 2005. It made no significant difference.
No, that happened in 2007-2008, after housing prices started dropping.
Read it and weep, sucker. You're timeline is all wrong. The mortgage crisis happened shortly after Bush Jr signed this into law, not 1995:
On December 16, 2003, President George W. Bush signed into law the American Dream Downpayment Initiative, which was aimed at helping approximately "40,000 families a year" with their down payment and closing costs.
Bush drive for home ownership fueled housing bubble
WASHINGTON — "We can put light where there's darkness, and hope where there's despondency in this country. And part of it is working together as a nation to encourage folks to own their own home."
- President George W. Bush, Oct. 15, 2002
The global financial system was teetering on the edge of collapse when Bush and his economics team huddled in the Roosevelt Room of the White House for a briefing that, in the words of one participant, "scared the hell out of everybody."
It was Sept. 18. Lehman Brothers had just gone belly-up, overwhelmed by toxic mortgages. Bank of America had swallowed Merrill Lynch in a hastily arranged sale. Two days earlier, Bush had agreed to pump $85 billion into the failing insurance giant American International Group.
The president listened as Ben Bernanke, chairman of the Federal Reserve, laid out the latest terrifying news: The credit markets, gripped by panic, had frozen overnight, and banks were refusing to lend money.
Then his Treasury secretary, Henry Paulson Jr., told him that to stave off disaster, he would have to sign off on the biggest government bailout in history. Bush, according to several people in the room, paused for a single, stunned moment to take it all in.
"How," he wondered aloud, "did we get here?"
Eight years after arriving in Washington vowing to spread the dream of home ownership, Bush is leaving office, as he himself said recently, "faced with the prospect of a global meltdown" with roots in the housing sector he so ardently championed.
But the story of how the United States got here is solely one of Bush's own making, according to a review of his tenure that included interviews with dozens of current and former administration officials.
From his earliest days in office, Bush paired his belief that Americans do best when they own their own homes with his conviction that markets do best when left alone. Bush pushed hard to expand home ownership, especially among minority groups, an initiative that dovetailed with both his ambition to expand Republican appeal and the business interests of some of his biggest donors. But his housing policies and hands-off approach to regulation encouraged lax lending standards.
"There is no question we did not recognize the severity of the problems," said Al Hubbard, Bush's former chief economic adviser, who left the White House in December 2007.
And both Paulson and his predecessor, John Snow, say the housing push went too far.
"The Bush administration took a lot of pride that home ownership had reached historic highs," Snow said during an interview. "But what we forgot in the process was that it has to be done in the context of people being able to afford their house. We now realize there was a high cost."
Lawrence Lindsay, Bush's first chief economic adviser, said there was little impetus to raise alarms about the proliferation of easy credit that was helping Bush meet housing goals.
"No one wanted to stop that bubble," Lindsay said. "It would have conflicted with the president's own policies."
Today, millions of Americans are facing foreclosure, home ownership rates are virtually no higher than when Bush took office, Fannie and Freddie are in a government conservatorship, and the bailout cost to taxpayers could run in the trillions of dollars.
As the economy has shed jobs - 533,000 last month alone - and his party has been punished by irate voters, the weakened president has granted his Treasury secretary extraordinary leeway in managing the crisis.
In recent weeks Bush has shared his views of how the nation came to the brink of economic disaster. He cites corporate greed and market excesses fueled by a flood of foreign cash - "Wall Street got drunk," he has said - and the policies of past administrations. He blames Congress for failing to reform Fannie and Freddie.
Last week, Fox News asked Bush if he was worried about being the Herbert Hoover of the 21st century. "No," Bush replied. "I will be known as somebody who saw a problem and put the chips on the table to prevent the economy from collapsing."
Darrin West could not believe it. The president of the United States was standing in his living room. It was June 17, 2002, a day West recalls as "the highlight of my life." Bush, in Atlanta to introduce a plan to increase the number of minority homeowners by 5.5 million, was touring Park Place South, a development of starter homes in a neighborhood once marked by blight and crime.
"Part of economic security," Bush declared that day, "is owning your own home."
So Bush had to, in his words, "use the mighty muscle of the federal government" to meet his goal. He proposed affordable housing tax incentives. He insisted that Fannie Mae and Freddie Mac meet ambitious new goals for low-income lending.
Concerned that down payments were a barrier, Bush persuaded Congress to spend as much as $200 million a year to help first-time buyers with down payments and closing costs.
And he pushed to allow first-time buyers to qualify for government insured mortgages with no money down. Republican congressional leaders and some housing advocates balked, arguing that homeowners with no stake in their investments would be more prone to walk away, as West did. Many economic experts, including some in the White House, now share that view.
The president also leaned on mortgage brokers and lenders to devise their own innovations. "Corporate America," he said, "has a responsibility to work to make America a compassionate place."
And corporate America, eyeing a lucrative market, delivered in ways Bush might not have expected, with a proliferation of too-good-to-be-true teaser rates and interest-only loans that were sold to investors in a loosely regulated environment. But Bush populated the financial system's alphabet soup of oversight agencies with people who, like him, wanted fewer rules, not more.
The president's first chairman of the Securities and Exchange Commission promised a "kinder, gentler" agency. The second was pushed out amid industry complaints that he was too aggressive. Under its current leader, the agency failed to police the catastrophic decisions that toppled the investment bank Bear Stearns and contributed to the current crisis, according to a recent inspector general's report.
As for Bush's banking regulators, they once brandished a chain saw over a 9,000-page pile of regulations as they promised to ease burdens on the industry. When states tried to use consumer protection laws to crack down on predatory lending, the comptroller of the currency blocked the effort, asserting that states had no authority over national banks.
The administration won that fight at the Supreme Court. But Roy Cooper, North Carolina's attorney general, said, "They took 50 sheriffs off the beat at a time when lending was becoming the Wild West."
The president did push rules aimed at requiring lenders to explain loan terms more clearly. But the White House shelved them in 2004, after industry-friendly members of Congress threatened to block confirmation of his new housing secretary.
In the 2004 election cycle, mortgage bankers and brokers poured nearly $847,000 into Bush's re-election campaign, more than triple their contributions in 2000, according to the nonpartisan Center for Responsive Politics. The administration did not complete the new rules until last month.
Today, administration officials say there is substantial evidence to conclude that Bush's home ownership push backfired and it caused the 2008 Great Recession.
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LOL. Gotta love this shit...
So the Federal Reserve Board of Governors, the Federal Reserve Bank of Atlanta, and George W. Bush's own hand-picked Working Group for Financial Markets are all wrong, and some weirdo right-wing hack is right, even though there's nothing to support anything he says.
Facts are there was no change to the CRA in 1995 that said nine years later, you can lower lending standards for subprime loans.
There was no line of text in the 2000 repeal of Glass-Steagal that said 4 years later, you can lower lending standards for subprime loans.
The turmoil was triggered by a dramatic weakening of underwriting standards for subprime loans beginning in 2004 and extending through 2007...that's why mortgage delinquincies for subprimes spiked for those issued in 2005, 2006, and 2007, but that same spike didn't appear for subprimes issued in 2002:
The data is incontrovertible. The crisis was triggered by the defaulting of subprime loans issued with lending standards Bush and the Conservatives lowered.