Geee Posted February 10, 2012 Share Posted February 10, 2012 Investors Business Daily: Subprime Scandal: Announcing a massive $26 billion mortgage deal with "abusive" banks, the president blamed everybody for record foreclosures except the party most culpable: government. Speaking Thursday from the White House, Obama scolded "irresponsible" and "reckless" lenders, who "sold homes to people who couldn't afford them." He also cited buyers who bought homes bigger than their budgets, and Wall Street bankers who packaged the shaky mortgages and traded them for "profit." "It was wrong," he asserted. And now the nation's "biggest banks will be required to right these wrongs." Obama acts as if the private sector bears all the responsibility for the mortgage mess. But he and his attorney general know it's merely a scapegoat for the reckless government housing policies they and their ilk drafted and enforced in the run-up to the crisis. Starting in the mid-1990s — in a historic first — it became federal regulatory policy to force all U.S. lenders to scrap traditional lending standards for home loans on the grounds they were "racially discriminatory." President Clinton fretted that blacks and other minorities could not qualify for mortgages at nearly the same rates as whites and Asians. So Clinton codified more "flexible" underwriting standards in a "Policy Statement on Discrimination in Lending," and entered it into the Federal Register. At the same time, he set up a little-known federal body made up of 10 regulatory agencies — the Interagency Task Force on Fair Lending — to enforce the looser standards. It threatened lenders to either ease credit for low-income borrowers or face investigations for lending discrimination and suffer the related bad publicity. It also threatened to deny them expansion plans and access to Fannie Mae and Freddie Mac. Link to comment Share on other sites More sharing options...
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