How Is Obama Going To Fix Clinton's Housing Mess?

Update:

1) Clinton created the housing bubble which is now collapsing. http://www.frbsf.org/publications/economics/letter... (Federal Reserve website)

2) Clinton ignored a government report that said bank derivatives were dangerous to the economy. He also threatened to fine banks that were not giving loans to poor people.

3) Clinton, ACORN, and Rubin pushed for changing laws to provide more risky loans.

Update 2:

Since 2001, President Bush warned of the problem and put forward plans to fix Fannie Mae and Freddie Mac:

http://www.whitehouse.gov/news/releases/2008/09/20...

In 2003, "Spurred by worries that Fannie and Freddie were cooking their books and taking too many risks, Treasury Secretary John Snow proposed placing the companies under Treasury oversight with strict controls over risk and capital reserves. The NYT labeled the proposal "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago""

http://www.usnews.com/blogs/sam-dealey/2008/9/10/b...

Update 3:

There is a problem with credit default swaps because there are too many foreclosures. It is has to do with secondary lending.

Update 4:

In 1997 Clinton "actively sponsored " risky home loans :

""...rapid growth in affordable-loan programs and subprime lending..."

"The growth in these [special loan] programs has been actively sponsored by the Clinton administration "

"The currently strong housing market is due in part to the initiation of a wide variety of affordable home-loan programs. These programs are intended to benefit low-income and minority households and neighborhoods through more flexible underwriting policies. These policies include low-downpayment requirements, higher acceptable ratios of debt payment to income, the use of alternative credit history information such as records of payments for rent and utilities, flexible employment standards, and reduced cash reserve requirements. The growth in these programs has been actively sponsored by the *** Clinton administration *** in a concerted effort to raise home-ownership rates."

Mortgage Banking [News] - Aug 1, 1997

Update 5:

Some of Clinton's Freddie Mac changes:

"Freddie Mac, one of the primary government-sponsored enterprises involved in the purchase of mortgages, recently announced plans to enter the secondary market in subprime loans by purchasing significant numbers of "A minus" subprime mortgages by 1998 and the higher-risk "B and C" loans by 1999.(20) "

One of Clinton's changes to foreclosure insurance ( that protected banks ).

"On June 6, 1996, President Clinton announced that he had directed FHA to reduce the up-front mortgage insurance premium (UFMIP) for first-time homebuyers who receive housing counseling"

12 Answers

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  • 1 decade ago
    Favorite Answer

    lol, housing mess? that is a tiny part of it.

    AIG is in trouble due to credit default swaps,

    legal gambling on what an investment will do, sold as insurance. You don't even have to own the thing you are betting on, and it is unregulated.

    This is the big problem.

    The government is coverning these bets when these investment banks do not have enough to back the bets they took.

    This is a scam and we are all getting screwed by the bankers

    Source(s): Mortgage defaults are only at 3.5% right now, and will only reach just over 4% next year. 96% of Mortgages are good. You can't blame the mortgage market on this mess subprime mortgage defaults were the trigger for the crisis, not the cause at all. They were just a small piece of the puzzle. In fact we could cover all the mortage defaults for under 500 billion, but thats not the issue at all. There are 25 trillion in CDS that we do not even know who owns!!!
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  • 1 decade ago

    If you have been watching the financial news which did not make the headline just four weeks ago when FDIC and Indy-Mac (Failed Bank in CA) launched the Pilot program to rework over 287,000 Mortgages to stop foreclosures and help families under a G.W. Bush directive.

    Now Obama is going to take credit for this solutionwhich is to expand to all mortgage lender by the end of January, 2009.

    Just wait and see.

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  • 1 decade ago

    1) Clinton created the housing bubble

    Under what executive order.

    2) Clinton ignored a government report that said bank derivatives were dangerous to the economy. He also threatened to fine banks that were not giving loans to poor people.

    Your link please.

    3) Clinton, ACORN, and Rubin pushed for changing laws to provide more risky loans.

    You lackie linkies.

    "...if you own something, you have a vital stake in the future of our country. The more ownership there is in America, the more vitality there is in America, and the more people have a vital stake in the future of this country."

    -President George W. Bush, June 17, 2004

    # Expanding Homeownership. The President believes that homeownership is the cornerstone of America's vibrant communities and benefits individual families by building stability and long-term financial security. In June 2002, President Bush issued America's Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap that exists between the homeownership rates of minorities and non-minorities. The President also announced the goal of increasing the number of minority homeowners by at least 5.5 million families before the end of the decade. Under his leadership, the overall U.S. homeownership rate in the second quarter of 2004 was at an all time high of 69.2 percent. Minority homeownership set a new record of 51 percent in the second quarter, up 0.2 percentage point from the first quarter and up 2.1 percentage points from a year ago. President Bush's initiative to dismantle the barriers to homeownership includes:

    * American Dream Downpayment Initiative, which provides down payment assistance to approximately 40,000 low-income families;

    * Affordable Housing. The President has proposed the Single-Family Affordable Housing Tax Credit, which would increase the supply of affordable homes;

    * Helping Families Help Themselves. The President has proposed increasing support for the Self-Help Homeownership Opportunities Program; and

    * Simplifying Homebuying and Increasing Education. The President and HUD want to empower homebuyers by simplifying the home buying process so consumers can better understand and benefit from cost savings. The President also wants to expand financial education efforts so that families can understand what they need to do to become homeowners.

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  • 1 decade ago

    Clinton did not cause the housing crisis by pushing for sub-prime loans. it was the requirements or lack there of set by Fannie Mae and Freddy Mack which actually caused the problems. 100% financing, no-doc loans, etc. are all perfect examples of bad loans. common sense tells you that if a person has no money to put down on a home or can not prove their income that it's not a wise decision. Clinton nor any other politician had no say in the writing of the actual loan terms. lenders saw an opportunity to rake in tons of money. it was the combination of greed and the lack of proper over-site which caused the housing mess not Clinton pushing for "sensible" sub-prime loans.

    Source(s): 14 years as a mortgage broker
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  • 1 decade ago

    Eminent Domain.

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  • Anonymous
    1 decade ago

    Oh please. Bush had 6 years with a rubber stamp Congress to change what you call Clinton's mistakes. He did not. His lip service went nowhere because the Republicans liked it just the way it was. They worship deregulation and now they lost the election because of it. That and that twit Palin. It's over, you guys lost. Why can't any of you seem to get over that?

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  • 1 decade ago

    Man, I cannot believe that everything wrong in America is still Clinton's fault. I guess all those stories about him having sold his soul to the devil were true. I think we should stick a stake through his heart.

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  • 1 decade ago

    i was trying to explain this to my friend....bush gets blamed for the economy being in the shtter when its actually clintons fault

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  • 1 decade ago

    You mean when the Clinton's trashed the white house? haha

    With the Democratic congress in place, I only see it getting worse.

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  • 1 decade ago

    Hire Bush and Laura as maids.

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