Fannie and Freddie

You won’t see too much about this in the regular press.  How the Fannie Mae and Freddie Mac meltdown was actually started by Clinton.  How Obama was one of it’s biggest recipients.  This article by Dr. Jon Lott is pretty informative.  Even the NY Times understood that this meltdown was going to occur 10 years ago

More information here: Confused Americans for Truth – Another False Obama Rumor

An awesome video also gives a rundown on what happened.

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Posted on September 30, 2008, in Financial, Politics and tagged , , . Bookmark the permalink. 4 Comments.

  1. Of course it was; he was in charge when the interest rates were so low that ANYONE could buy a home and I mean anyone. That being said, Bush should have done something to stop it while he was in office.

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  2. Jwo – Welcome. 🙂 Thanks for stopping by.

    I don’t think it was simply a matter of interest rates though. The interest rates on subprime loans weren’t all that low. It was more of risky loans being made to high credit risk folks. I think Bush did try to get something pushed through, but the Democrats in Congress were really against it.

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  3. Agreed to your statement. Once again though, Greenspan and to a lesser extent Clinton could have increased interest rates to not make it as attractive for EVERYONE to get a mortgage.

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  4. JWO – Thanks for coming back. 🙂 I’m not sure I agree with you on the interest rate thing though – I know subprime loans were over 10%, sometimes even as high as 15%, and not fixed either. Those aren’t low rates. I think the problem came in when the government forced banks to give loans to people who would not have normally qualified. That’s why the loans were subprime, as opposed to prime loans. It forced banks to become lenders to people they would not have typically given loans to. Then when the interest rates went up, combined with rising gas prices, and higher unemployment, people couldn’t make their payments anymore and so defaulted. Subprime loans were a nice idea in theory – giving low-income people a chance at a home – but in reality it simply didn’t work. It wasn’t that interest rates were low – because they were extremely high when the CRA was introduced in ’77. It started to get bad in ’95, when Clinton made banks liable to lawsuits if they didn’t lend to high-risk people.

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