Financial Crisis -- In The Beginning

Liberals do it every time ... The people in Washington, i.e. Congressmen and Senators, who were supposed to be looking out for you, looking out for America, were looking out for themselves.

Why were the banks giving out home loans to borrowers who were not qualified -- Because the laws passed by Congress forced them to. The banks and others also were allowed by law, to record the bad loans as assets.

It was regulation and laws that redistributed wealth to poor and others who could not afford homes because there were quotas to be met, all forced by regulations and laws, with the probable outcome -- Socialism run amok.

All roads to this crash of the financial system lead through Fannie Mae and Freddie Mac ...




This all started in the Carter years with the CRA for primarily low income home buyers -- Otherwise known as unqualified buyers. 1977's Community Reinvestment Act(CRA) which required banks and savings institutions to make loans to the lower-income areas in the communities they served. Read that as unqualified buyers, that was the goal, give loans to those who could not afford to repay, it was only fair, don't you know.

Then in the 1990s, the Clinton and Democrat obsession with doing away with the nonexistent process of 'redlining' continued. The sub-prime loans were bundled and shipped off to Fannie and Freddie and others to use as collateral to back up requirements for capital at those institutions.

Association of Community Organizations for Reform Now, is the nation's largest community organization of low and moderate income families -- ACORN, who was pushing this practice on all fronts, was street agitator Obama's employer -- Obama was one of the lawyers who represented ACORN in forcing more sub-prime loans. The threats to banks and others who wouldn't take the sub-prime loans on continued. All was fine since FANNIE and FREDDIE were backing up the paper.

In 1999 -- An agreement between the Clinton administration and congressional Republicans, sets the stage for passage of the most sweeping banking deregulation bill in American history, lifting virtually all restraints on the operation of the financial system. The result was the Gramm-Leach-Bliley Financial Services Modernization Act of 1999.

The certain result of repeal of most of the remaining restrictions of Glass-Steagall it was thought there would be a wave of new money pumped into the unqualified buyer home market -- Most saw this as an area of expansion of market. The Wall Street Journal wrote, "With the stroke of the president's pen, investment firms like Merrill Lynch & Co. and banks like Bank of America Corp., are expected to be on the prowl for acquisitions." The financial press predicted that the most likely mergers would come from big banks acquiring insurance brokerage companies, with John Hancock, Prudential and The Hartford all expected to be targeted.

Short history of the Glass-Steagal Act up until it's repeal in 1999. It took $100s of millions in lobbyist payoffs to Congress people before Glass-Steagall was finally repealed.

Then came the American Dream Down payment Initiative(ADDI - 2003), which essentially made loan qualification, credit checks and other standard procedures when lending money for home mortgages, a form of discrimination. It was then off to the races, the rest as they say is history.

Bush tried to reinstate regulations and increase real capital margins in 2003 and McCain tried in 2005 to blow the whistle on this 'ponsie scheme' of home mortgages, but both attempts were blocked by Sen Dodd and Rep Barney Frank banking committee chairs in the respective Houses. In 2008, there were 18 additional instances of President Bush trying to call attention to the looming crisis before the financial system went off the rails -- But it was too late.

In the end it was all about massive liberal social engineering, the massive desire to get rid of financial controls which prevented home loans to unqualified people -- People that would have no chance of paying the loans back.

Well it has all came crashing down.

Mark Levin has more, from his show.