The Government didn’t cause the crisis. Greed was the cause. From people being greedy so they lied on their applications. To mortgage companies and banks that knowingly accepted those lies.
Wrong and right. The government was greedy.
Then the govt agreed to buy those bad mortgages. Without that critical factor they never would have been originated.
They never should have bought these mortgages. The politicians will try and blame it on the banks..but they were just doing what comes naturally.
Why do you think Mizzula Oil was sitting in Johnson’s office when Dodd calledu.
“To mortgage companies and banks that knowingly accepted those lies.”
WHY NOT?
There was no penalty, not even for blatant MORTGAGE FRAUD. This has been the greatest inner-city money game OF ALL TIME.
And all because of Jesse Jackson’s rants about “RACIST MORTGAGE BANKS!!!” and “Red-Lining”.
So, yet again, WE get to pay the price for failed Democrat Policies based on lies and Propoganda.
Your being naive.
Gov’t central planners had their hand in this. Pres. Bush wanted 5.5 Mil more homeowners. Well, he got it. We are all homeowners now.
‘We are here in Washington, D.C. to address problems. So I’ve set this goal for the country. We want 5.5 million more homeowners by 2010 — million more minority homeowners by 2010. (Applause.) Five-and-a-half million families by 2010 will own a home. That is our goal. It is a realistic goal. But it’s going to mean we’re going to have to work hard to achieve the goal, all of us. And by all of us, I mean not only the federal government, but the private sector, as well.’
http://www.whitehouse.gov/news/releases/2002/06/20020618-1.html
‘And so we’ve called upon Congress to set up what’s called the American Dream Down Payment Fund, which will provide financial grants to local governments to help first-time home buyers who qualify to make the down payment on their home. If a down payment is a problem, there’s a way we can address that. And when Congress funds the program, this should help 200,000 new families over the next five years become first-time home buyers.
More and more people own their homes in America today. Two-thirds of all Americans own their homes, yet we have a problem here in America because few than half of the Hispanics and half the African Americans own the home. That’s a homeownership gap. It’s a — it’s a gap that we’ve got to work together to close for the good of our country, for the sake of a more hopeful future. We’ve got to work to knock down the barriers that have created a homeownership gap.
I set an ambitious goal. It’s one that I believe we can achieve. It’s a clear goal, that by the end of this decade we’ll increase the number of minority homeowners by at least 5.5 million families. (Applause.)’
http://www.whitehouse.gov/news/releases/2002/10/20021015-7.html
The Government was responsible for making the rules. I think if we are looking to assign blame there are plenty of people and groups who acted together in causing this problem, including politicians, mortgage companies, appraisers, real estate agents, speculators and people bad at math. None of it could have happened without the rule changes at HUD under Cuomo.
The article indicates that government decisions are a major reason for the crisis. Mandates for sub prime loans, relaxed rules about yield spread premiums, and lax reporting about loan portfolio quality are major reasons for the crisis. These policies were begun with rats and continued with the pubs. I think that Utopian government policies stopped normal market forces from working properly.