Free Republic

It wasn't greed that caused the mortgage mess. In large part, the mess was the product of government policies designed to increase home ownership among the poor and ethnic minorities. Today Peter Wallison points out how Fannie Mae, Freddie Mac and the FHA created a demand for bad mortgages that encouraged mortgage brokers to generate millions of them. From the Wall Street Journal: Mortgage brokers had to be able to sell their mortgages to someone. They could only produce what those above them in the distribution chain wanted to buy. In other words, they could only respond to demand, not...

The Beltway hates it when Tea Party pols speak the truth. So when David Brat blamed the recession on Washington, it of course set up an intellectual firing squad to stop him. But it's shooting the same old blanks. In upsetting House Majority Leader Eric Cantor in Virginia's GOP primary, Brat never wavered from his position that government caused the financial crisis and has stunted the recovery with more of the same bad policies. And he's not backing away from it, despite media bashing. Here's how the economics professor turned politician explained it in a post-victory interview: "The American people...

Mel Watt, President Obama’s nominee for director of the Federal Housing Finance Agency, pushed government programs to help welfare recipients buy homes during the creation of the subprime mortgage bubble. Watt, a 20-year Member of Congress from North Carolina’s 12th district, also had a hand in programs allowing borrowers with poor credit to buy homes with no down payment. The American financial system was subsequently destroyed when millions of bad borrowers defaulted on their loans, setting off a market crash that wiped out nearly 40 percent of the net worth of Americans. In 2002, Watt teamed up with Freddie Mac...

Anyone doing research into the 2008 subprime mortgage securities scandal inevitably comes across the Internet gem below. Often titled “Derivative markets — an understandable explanation” but more commonly known by its first sentence — “Heidi is the proprietor of a bar in Detroit,” it appears to have been written in 2009 by an author with considerable understanding of financial markets and a great sense of humour. And it provides a good, basic explanation of the origins of the subprime mortgage securities crisis that led to a global credit freeze and the ongoing world-wide economic tsunami from which we may never...

Governor Sarah Palin is going to bring the economic crisis to an end. That’s Rob Bennett’s prediction. The twist is that Bennett claims Palin may be able to accomplish the task “before she becomes President.” Is Bennett going out on a limb–or climbing onto the limb and sawing it off?Palinomics Governor Sarah Palin is going to bring the economic crisis to an end. That’s my prediction. I think she may do it before she becomes President. It would make a good talking point in the debates to be able to say that you solved the nation’s most pressing problem before...

I find it strikingly strange to receive emails from my readers who are angry because the tone of our articles makes it sound as if the sky over America is falling and economic recovery is not going to happen. They think that I have no clue as to what I am writing about. I can only wish them a happy life and may all of their dreams come true. But before you close your browser, I would like to present to my readers who believe that economic collapse is highly unlikely, 7 undeniable and dreadful signs or proof of the...

Fannie Mae and Freddie Mac recently announced fresh losses, bringing their total since the fall of 2008 to $126 billion. It barely registered as news -- although taxpayers are completely on the line for the bad debt of these government-sponsored enterprises. There's a chance that the support thrown at the rest of the financial sector -- $465 billion of direct capital, $285 billion of loan guarantees and insurance of $418 billion of assets -- isn't all money down the drain. $175 billion has been returned, the loan guarantees look much safer, and the insurance program, mainly for Citigroup, has been...

New York Attorney General Andrew Cuomo is the "father of the subprime crisis" and his aggressive attacks on Wall Street could make him dangerous to the banking sector if he becomes the next governor of New York, well-known banking analyst Dick Bove told CNBC. "One of the key reasons why (Fannie Mae and Freddie Mac are] bankrupt today, and why the government is spending hundreds of millions of dollars in supporting them, is because of the edicts pushed through by Mr. Cuomo," said Bove, of Rochdale Securities, in a live interview. "It's also thought by many that the hundreds of...

Isn't this how we got into trouble in the first place? Banks being forced to write bad mortgages were forced to hold too many bad loans? Then why are the federal government-owned Fannie Mae and Freddie Mac pushing banks to buy back their lousy loans. Its kind of like the "anti-TARP," instead of helping out banks, we are forcing them to rack up losses. Bloomberg is reporting that Fannie Mae and Freddie Mac may force lenders including Bank of America Corp., JPMorganChase & Co., Wells Fargo & Co. and Citigroup Inc. to buy back $21 billion of home loans this...

All agree that the bursting of the housing bubble caused the financial collapse of 2008. Most agree that the housing bubble started in 1997. Less well understood is that this bubble was the result of government policies that lowered mortgage-lending standards to increase home ownership. One of the key players was the controversial liberal advocacy group, Acorn (Association of Community Organizations for Reform Now). The watershed moment was the 1992 Federal Housing Enterprises Financial Safety and Soundness Act, also known as the GSE Act. To comply with that law's "affordable housing" requirements, Fannie Mae and Freddie Mac would acquire more...

There's a list of acquaintances of Barack H. Obama and the list deserves its own thread for reference purposes and if you have new ties to Barack Obama, please post their name and if applicable, their aliases. Please post how they know Barack Obama and why it matters.

Professors Against the Bailout by: Bethany Stotts, September 29, 2008 Politicians opposing the $700 billion bailout, known as the Paulson plan, got support from an academic venue on Thursday, September 25. Senator Richard Shelby (R-Alabama) met before the press that day to explain his opposition to the plan. “I don’t know if you have this, but I have…five pages of the leading economists in America that wrote to me and the leadership saying ‘the Paulson plan is a bad plan, it will not solve problems, it will create more problems, we’re rushing to judgment, and that we do have stress...

Wachovia Corp, the fourth-largest U.S. bank, on Tuesday posted an $8.86 billion second-quarter loss, slashed its dividend and announced 6,350 job cuts after losses tied to mortgages soared. Its shares fell $1.67, or 12.7 percent, to $11.51 in premarket trading. The net loss for the Charlotte, North Carolina-based bank equaled $4.20 per share, and compared with a profit of $2.34 billion, or $1.22, a year earlier. Excluding items, the loss was $1.27 per share, compared with the average analyst estimate of $1.30, according to Reuters Estimates. "These bottom-line results are disappointing and unacceptable," Chairman Lanty Smith said in a statement....

July 23, 2008, 1:00 a.m. Our Government Problem-SolversAt election time, pols can't help but "do something" — even if it makes matters worse. By Thomas Sowell We don’t look to arsonists to help put out fires but we do look to politicians to help solve financial crises that they played a major role in creating. How did the government help create the current financial mess? Let me count the ways. In addition to federal laws that pressure lenders to lend to people they would not otherwise lend to, and in places where they would otherwise not invest, state and...

Imagine listing your home for sale, but there are no buyers. You drop the price. Again. And again. The house across the street's now for sale. And the one two doors down, plus a dozen others in a two-block radius. Nothing's selling, and every time one home is reduced, all are affected. This property used to represent wealth. Now it's a wealth trap. Most of what you have is here, and with each day passed, it diminishes. Imagine your first home - a dream in granite and stainless. You bought it from the region's largest builder, for 1.5 per cent...

ORLANDO, Fla. (AP) - The white bus rumbles into the quiet suburban neighborhood, heading toward a foreclosed home that sits empty. Neighbors, young and old, cock their heads in curiosity or point at the slow-moving coach. Once the vehicle stops, about 20 potential buyers file out and become detectives, opening and closing cabinets and drawers, knocking on walls and asking about the price, the previous owners and what repairs may be needed. Welcome to the Foreclosure Bus Tour, a six-hour expedition to show Orlando-area homes and educate potential buyers on the vagaries of snatching foreclosures in a state where the...

Hello, Hillary? Hate to wake you, but it's 3 o'clock in the morning, and we have a real crisis. It's your campaign, senator. It's Hail Mary time. You've lost the bid for a revote in Florida and, it seems, in Michigan, which means your prospects for prevailing over Barack Obama in the primary popular vote by June are vanishing fast. The Illinois senator, meanwhile, has just delivered a JFK-like speech on race in America--a savvy move that may well have stanched the hemorrhaging of his campaign over the controversial remarks made by his pastor, Jeremiah Wright. The mood could be...

They had small means and big hopes of owning a house. But African-Americans snared in the US mortgage crisis have seen the American dream turn into a nightmare many call "financial apartheid." The storm triggered by risky "subprime" loans has left many in ruins, forced out of their modest homes and furious at falling victim to financial dealings that have taken a particular toll on minority families. "People of color are more than three times more likely to have subprime loans," concluded the organization United for a Fair Economy in a recent report which estimated that minorities have seen between...

Behind the recent bad news lurks a much deeper concern: The world economy is now being driven by a vast, secretive web of investments that might be out of anyone's control.

The real estate auction business is booming. Real Estate Disposition Corp is auctioning 2,000 homes in California and 575 in DC, Maryland, and Virginia. More states are coming up.