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Originally Posted by jmoore130
Sounds like your A republican White superstitious who loves bush . I believe the Congress was controlled by The Republicans for the last 6 years , And what you sound like your saying is This is all the presidents fault from 8 years ago . Seems like the country was going alot better back then , then it is now , Lolz
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Community Reinvestment Act - Wikipedia, the free encyclopedia
sorry but it was mostly Clinton's policies that let freddi and fannie mae have free reign on the housing market. If we really want to go deep enough it started with Carter and the HMDA/fair housing act which made it alot more fair and attainable to purchase homes.
This being said after the 80's when we had a minor crisis in the economy Bush sr. Reign they put into some regulatory changes that allowed relaxed laws in regards to the lending market.
When Clintons reign came into play we kept most of Bush sr. policies.
Long story short companies would go through Fannie mae/Freddie mae for lending.
these are both not regulated by the country at this time.
When you hear about variable rate loans and exotic loans on homes this is why the companies aka countrywide/americredit/brokers poked out many customers eyes.
ex= i can afford a home for 200k with my current salary vs the rate and term the mortgage company is giving me lets say a
$1500 pmt
360mth term/30yrs
200k loan
well the mortage company tells me about an exotic loan called 5 yr intrest only(one of many types) so now lets look at what i can afford.
keeps a $1500 pmt
360mths/30yrs
but now we are doing interest only so on 200k my pmt would be $500 instead of $1500
brokers being on commision took advantage of this by now telling customer he since your pmt is only $500 on a intrest only 200k loan lets put you in a 400k loan at that same pmt of $1500(interest only) Customer being a greedy american (i'm the same way) said YES a huge house lets do it.
Lets look at 5yrs later.
I have paid no principle in 5yrs the bloated housing market is going down so my 400k house is worth 350k now.
so what does that mean to you?
Well my 5yrs is up and my pmt is now $3000 a month and i can't afford that so lets refinance for a lwoer pmt.
WRONG your house has decreased in value.
can't afford your home plz pack your thing get out your being forclosed on.
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how does this effect the economy/world economy
well companies bundled large anounts of loans and used them as securities(collateral to borrow money)
they have them rated as AAA BBB CCC type securities
so the government did not look into these securities and did not realize that there were the type of loans that were bound to crap out over time.
So large companies that had the collateral now had collateral that was worth nothing this included worldwide companies.
Long story short Clinton should have caught this along with the rest of the government.
Well boys and girls I'm at work and have to get back.
This nearly scrathes the surface.
Now when sombody ask you why our economy crashed you have a little more know about it!
p.s. Obama Was part of an organization called ACORN that was all apart of this, This government is all about smoke and mirros keep the masses scared and confused and do what we want in the background!