Both the Democrats and Bush were on board with loosening lending practices. Here are some excerpts from a Bush speech in Atlanta.
“And what we’ve got to do is to figure out how to make sure these stories are repeated over and over and over again in America. Three-quarters of White America owns their homes. Less than 50 percent of African Americans are part of the home-ownership in America, and less than 50 percent of the Hispanics who live here in this country own their home. And that has got to change for the good of the country; it just does.”
“And so that’s why I propose and urge Congress to fully fund the American Dream Downpayment Fund. This will use money, taxpayers’ money, to help a qualified low-income buyer make a downpayment, and that’s important.”
“One of the barriers to homeownership is the inability to make a downpayment. And if one of the goals is to increase home-ownership, it makes sense to help people pay that downpayment. We believe that the amount of money in our budget, fully approved by Congress, will help 40,000 families every year realize the dream of owning a home. “
“And we want to fully implement the Section 8 housing program, homeownership program. The program will provide vouchers that first-time home buyers can use to help pay their mortgage or apply to their downpayment.”
“That’s why I’ve challenged the industry leaders all across the country to get after it for this goal, to stay focused, to make sure that we achieve a more secure America by achieving the goal of 5 1/2 million new minority homeowners. I call it America’s homeownership challenge.”
“And let me talk about some of the progress which we have made to date, as an example for others to follow. First of all, Government-sponsored corporations that help create our mortgage system—I introduced two of the leaders here today; they call those people Fannie Mae and Freddie Mac—as well as the Federal Home Loan Banks will increase their commitment to minority markets by more than $440 billion. I want to thank Leland and Franklin for that commitment. It’s a commitment that conforms to their charters as well and also conforms to their hearts. This means they will purchase more loans made by banks to African Americans, Hispanics, and other minorities, which will encourage homeownership.”
George W. Bush
http://www.presidency.ucsb.edu/ws/index.php?pid=62687
You know what’s really neat about a healthy economy (which is what Bush + Republican Congress gave us. You could cut taxes, increase spending AND reduce the deficit. Amazing, isn’t it? But quite true, and a matter of historical record.
You know what’s really neat about a healthy economy (which is what Bush + Republican Congress gave us. You could cut taxes, increase spending AND reduce the deficit. Amazing, isn’t it? But quite true, and a matter of historical record.
Democrat Bill Clinton later reinforced the Act, as the Democrat Black Caucus expanded its enforcement at Fannie and Freddie and low-income Community Organizations like ACORN, soon perfected the art of exploiting the programs.
In April 2001, before the events of 9/11 and just after entering the White House, President Bush began signaling warnings to members of congress that both Fannie and Freddie were headed into deep treacherous waters which could cause “strong repercussions in financial markets.”
In early 2003, the Bush White House upgraded its warnings to “a systemic risk that could extend well beyond just the housing markets.”
On September 10, 2003, Bush Treasury Secretary John Snow testified in congress that something had to be done to confront the growing storm at Fannie and Freddie.
Democrat Barney Frank, now Chairman of the House Financial Services Committee, reacted by saying “Fannie Mae and Freddie Mac are NOT in a crisis...” completely rejecting Bush administration calls for reform.
Frank went on to say that Fannie and Freddie should do even more to get low-income families into homes. “The more people, in my opinion, exaggerate the threat of safety and soundness, the more people conjure up the possibility of more serious financial losses to the treasury, which I do not see, I think we see entities that are fundamentally sound financially, and withstand some of the disaster scenarios, and even if there were a problem, the federal government doesn’t bail them out, but the more pressure there is there, then the less, I think we see, in affordable housing.” Said Democrat Frank
Congressional Democrats then killed the 2003 bill put forth by Republicans, intended to head off financial crisis.
In 2005, Fed Chairman Alan Greenspan went before congress to sound an even louder warning concerning the soundness of the Government Sponsored Enterprises headed for disaster, testifying that, “Without restrictions on the size of GSE balance sheets, we put at risk our ability to preserve safe and sound financial markets in the United States, a key ingredient of support for homeownership.” Again, Democrats reacted by ignoring the warnings and blocking all legislative efforts to confront the economic tsunami now raging towards land.
In May 2006, Republican Senator John McCain sponsored legislation aimed at immediately reforming Fannie and Freddie, and once again, Democrats led by New York Senator Charles Schumer, blocked the Republican effort to avoid impending financial calamity. The bill failed by a strict party line vote, in which every Senate Democrat voted against reforming the GSE’s.
In 2007 and 2008, several more Republican efforts to address the coming failure of Fannie and Freddie were put forth, but Democrats regained full control of both the Senate and the House in 2006, and they continued to deny any impending financial crisis.
On September 7, 2008 Fannie and Freddie were placed into conservatorship, bankruptcy.