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Politics : The Obama - Clinton Disaster -- Ignore unavailable to you. Want to Upgrade?

To: MJ who wrote (60602)	11/22/2011 10:18:53 PM
From: Hope Praytochange	1 Recommendation Respond to of 103300

Despite Book’s Claims, Clinton Policies Hurt Economy Posted 06:46 PM ET Subprime Scandal: President Clinton is plugging a new book scolding Wall Street and Republicans and offering his "solutions" to an economic mess he helped cause. His gall knows no bounds. The media portray Clinton, who acts as if he were still president, as some kind of hero riding in to save the economy. But it was his own policies that wrecked it. And now he's covering up his fault by blaming others, when in fact he forced banks to make high-risk loans in the name of diversity. "When President George W. Bush took office, it was the first time anti-government Republicans had held both houses of Congress and the White House. They could do whatever they wanted," Clinton intones in "Back to Work: Why We Need Smart Government for a Strong Economy." "It soon became clear they wanted less regulatory oversight" of the financial sector. In fact, the problem was too much regulation, not too little. Starting in the 1990s, banks came under siege by regulators who politicized their mortgage-underwriting decisions on Clinton's orders. He added teeth to anti-redlining laws under the Community Reinvestment Act, and made it nearly impossible for banks to expand if they didn't pass CRA lending tests. Then he ordered Fannie Mae and Freddie Mac to buy and bundle the riskier mortgages into securities to meet the higher "affordable-housing" lending quotas he slapped on the publicly created mortgage giants. These policies carried over into the Bush administration, which was a big mistake. But it was Clinton who fundamentally changed the rules for risk and the home-finance market for the worse. "I made some mistakes too," Clinton said, without elaborating, "though not the ones I've been most widely criticized for (such as) aggressively enforcing the Community Reinvestment Act." He insists the 1977 law, which he rewrote in 1995, did not compel banks to make bad loans. "Conservatives blame the CRA for forcing banks to make risky mortgage loans they wouldn't have made otherwise," Clinton wrote. "It's true that my administration vigorously enforced the CRA requirement (but) making mortgages available to people in the community didn't cause the meltdown." In fact, the Fed estimates half the subprime loans were at least "indirectly attributable" to the CRA. Clinton concedes that Fannie and Freddie "eventually contributed to the severity of the collapse." But he claims that far from plunging them into the subprime market, he tried to warn Congress about their risky underwriting. "In 2000, well before the agencies made large purchases of subprime mortgage securities from 2004 through 2007, my economic team went up to Capitol Hill to warn Congress that both Fannie and Freddie were overleveraged," Clinton said. Once again, the impeached one stretches the truth. It was in 2000 that he ordered Fannie and Freddie to "expand" their subprime business to meet drastic new lending quotas. Clinton at the same time authorized them to earn "goals credit" by purchasing subprime securities. But don't take our word for it. A 2005 HUD report attributed the explosion in subprime securities between 2001 and 2004 to Clinton's higher lending goals, along with tougher CRA enforcement. "During the 1990s, lenders have been encouraged by HUD and banking regulators to increase lending to low-income and minority households," the HUD report said. "Sometimes these borrowers are higher risk, with blemished credit histories and high debt or simply little savings for a down payment." One of Clinton's top bank regulators, Ellen Seidman, actually bragged about inventing "a new market" for such high-risk mortgages on Wall Street. Funny how that's missing from his book. Like an arsonist-turned-firefighter, Clinton now wants to help save the housing industry he torched during his presidency.