Libertarians for Ron Paul

Who’s to Blame for the Subprime Meltdown?

“Just a few years ago, lending institutions were spending considerable time in courtrooms, accused of practicing so-called redlining, predatory lending, and discrimination. Bankers were not making enough loans to minorities, low-income households, and families with bad credit. A number of studies showed that white buyers were given preferential treatment when it came to obtaining a loan. A superficial examination of the records seemed to indicate a clear bias toward white couples.”…

“…Soon the federal government was in the forefront of initiating laws and adopting rhetoric to assist low-income, high-risk borrowers with generous mortgage programs, often enticing home buyers into loans they could not afford. The legislation included the American Dream Down Payment Act in 2003, which authorized the distribution of $200 million a year to help low-income families with down payments and closing costs. President Bush explicitly told federal agencies to loosen up or eliminate regulatory barriers to affordable home ownership.”

“Meanwhile, Fannie Mae and Freddie Mac, both government-sponsored enterprises that subsidize credit through the U.S. Treasury, got into the act.”

“According to Kathleen Hays at CNNMoney in 2005, “Fannie and Freddie have blazed the way for competitive mortgage products that have helped to revolutionize the mortgage lending industry in ways that the more conservative, less innovative banks had not in the past.”

Real Estate professional Larry Samuels looks at the mortgage mess http://ca.lp.org/lp20080505.shtml