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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Les H who wrote (262284)7/20/2010 11:13:03 PM
From: tejekRead Replies (3) of 306849
 
Portfolio limits weren't lifted until 2006.

If the economic and financial conditions were already ripe for a housing bubble, mainly low interest rates and lax regulation of the banks, it wouldn't have mattered which party was in power. They would've relaxed the conditions to try to extend the bubble. While the going was good, the Republicans protected the banks' mortgage business from the GSE's. The Democrats would've pressured the GSE's into relaxing their standards so the banks could originate more loans.

First let me clear up one thing up.......for those who don't know, Freddie and Fannie are buyers of mortgages in the secondary market. By the time they got involved the damage had already been done hundred fold.

I don't agree with you, Les, that either party could have done it. This whole debacle had a a Republican stamp to it. I mean how many bankers do you know who are Dems? The bankers took liberties because they got the *wink*wink* from DC types that no one would be checking up on them. They knew no one was watching. That was the first part of this mess.....the forging of income documentation and the fudging of appraisal prices to making housing sales work and extend the boom. From there, Wall Street took over. Wall Street is close to DC and they knew that the SEC watchdogs were not doing their job. So they came up with their fanciful derivatives.

This whole scheme took people who not only were crooked but firmly believed in the whole concept of laissez-faire and that gov't rules are made to be broken. That's the exact philosophy of the GOP as it exists today. Right now, the GOP is going around preaching the repeal of bank and health care reforms and the extension of the Bush tax cuts to the rich. The housing debacle means nothing to them. They got caught and paid a small price and that's history. Sorry Charlie!

Bush, Bernanke, and Greenspan get most of the blame because they took actions while the bubble was in its formative stages (2001-2002) and when it was in full force (2003-2006).

I think blaming Bernanke and Greenspan is nonsense. Just because a bank forgets to lock its doors one nite isn't license to steal its money.

The policies made during the 90's laid some of the foundation for the bubble but they didn't cause it and the regulators could've stopped them if they wanted to.

Exactly.
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