Just be happy THIS guy isn't president!!

Gew, I never said that Bush removed regulations, he was just asleep at the wheel. He admitted that he saw this coming in 2005, and never did ONE THING to stop it. The thing about my dog is 100% FACT, mortgage brokers have never been regulated before, during, or even NOW. It is a fact that republicans HATE regulations, and believe that the free market will fix everything.

Debater, you said the following, the Bush administration made it a priority to remove as much regulation as possible. It is just a question what regulation did the Bush administration remove? If you want to make the argument based on the idea that the Bush administration should have increased regulation then fine, but you did not say that. As to mortgage broker, I know a mortgage broker that would disagree with you. If it is 100% fact then prove it, do not just say it is.

This problem is what they call a cascading problem. Fannie and Freddy were a good idea to help banks that had the opportunity to make many loans but lacked the cash deposits to back the loans so a central agency buys the loans and and packages them and sells the Mortgage Backed Security (MBS). In the banking business a real estate loan is considered a very safe investment. MBS was also considered a very good investment and many foreign investors saw this a a very safe investment. Over the years we have had real estate cycles where as the price went up the demand went down and then the real estate market would do a correction and prices would drop and demand went up. Thirty years ago I could have bought 40 acres of wild land for $8,000. Fifteen to twenty years ago I could not sell a 40 acre piece for $2,000, five years ago 40 acres of wild land would cost between $10,000 and $12,000. Now in some places you can buy 40 acres for as little as $4,000. In the early 2000s there was a hearing before congress and an auditor told the committee that Fannie and Freddy were paying too much for the loans and were buying risky loans. Rep Barney Frank made his famous statement that they were sound financial institutions. He later said that with the information he has that was the conclusion he drew. The demand was still high for mortgage backed securities because they provided both growth and a dividend. Banks would bundle good and sub prime loans in one package and sell it to a Broker or investor and they would package other bank loans with them and sell shares in the MBS. Even today with all the foreclosure there is money to be made in some MBS if you are willing to take the risk. Alan Greenspan was terrified of inflation (demand high and supply low) so he kept interest rates low, to keep people buying and contractors building, at a time when there were people who were calling for increased rates to slow the demand for housing. The housing market needed to make a correction just like the stock market needs to make a correction. I can remember financial news programs telling how you could save money by buying a house instead of renting. Many people bought a house using an adjustable Rate Mortgage ARM. This is a loan where the interest is low to start with and then may (read as it will) increases as the market dictates. People who bought a home using an ARM and hoping that they would build equity, before the ARM made its increase, so they could switch to a fixed rate loan. As some of these people saw their monthly payment (loan, insurance and taxes) increase by $200 to $500 a month they tried to sell their house and suddenly there was more supply than demand and the prices dropped. This triggered another reaction from the bank. Banks are required to have the loan to value at a certain amount like 85%. This means that the loan has to be 85% of the value of the property or less. When the loan reaches 90% or higher of the loan to value ration the bank has to start foreclosure even if you are making your payment on time. Unlike dealing with the bank in town your mortgage is now held by a bank or group in London, Tokyo, Boston or New York and they only deal in numbers. In this Cascading problem where do you stop it or prevent it. Change anything along the way and you create another problem. Increase interest rate and you cause increased unemployment. Disallow MBS and your money to loan is suddenly not there. Break up Freddy and Fannie and you have bankers trying to find banks and investors to buy their loans. In one way you could do a news story and show who ever you want to blame that they were at fault. In reality everyone is and no one is.

Bob, Fannie, and Freddy have been around since 1938, the Community Reinvestment Act in 1977, and we didn't have problems until the 2000's. So please explain to all of us how it is that it took decades for these two acts to destroy our economy? Can you please show me the act of congress that FORCES private mortgage companies to make bad loans? I have asked many people, and NO ONE has provided me with this act. It sounds like you have done SOME research, but you should also watch the CNBC documentary House of Cards. It will show you exactly how WRONG Rudy really is. You can read all of these explanations of how Acts "may have", or "court rulings" could have caused this. But, this documentary talks to the men that actually MADE these loans, and tells you how this happened, from the ground level. If it wasn't for these crooks, then this NEVER would have happened. Watch it, and see. I even gave you a link http://www.bankaholic.com/cnbc-house-of-cards/

So what you are saying is that the entire mortgage industry is TO BIG TO FAIL? By the way, did you watch the video? If you REALLY want to know how these guys made millions, you will like this video. I will make you sick to your stomach at the end, but you will learn more about this mess than anywhere on the net.

Mr. please show the act of congress that MADE THEM do this? I have NEVER seen any act that FORCED private banks to make loans to people.

Dark, there is a very good documentary on CNBC called "House of Cards", they will explain to you how the GSE's played a part in this, but they were far from the only ones. You will see how private mortgage brokers were making millions selling bad loans to the large financial institutions. I have never heard of the government threatening private banks to make loans, is there a link that you have to this? I can explain to you what REALLY happened (and I have MANY times on here), but you wouldn't care, nor believe it to be true. Listen to Tom Sullivan sometime, and he might explain it to you, as he did me. I normally don't listen to right wing hate radio host, but he isn't the only one I heard this explanation from, and I believe it to be true.