Discuss the second installment of this week's Dust-Up

To blame the CRA for the subprime mortgage crisis is both disingenuous and badly-informed.In the February 2008 House hearing, law professor Michael S. Barr, noted that approximately 50% of the subprime loans were made by independent mortgage companies that were not regulated by the CRA. He stated that institutions fully regulated by CRA made "perhaps" one in four sub-prime loans. Referring to CRA and abuses in the subprime market, Michael Barr stated that in his judgment "the worst and most widespread abuses occurred in the institutions with the least federal oversight".

LeRoy General @ 7:35 AM PDT, Oct 16, 2008

All you need to do is to look at the obstructive cronies in our Congress such as Frank, Dodd and Clinton when he was plugging Monica. These are the people who have now handed us what will surely be and economic coffin with Obama hammering in the nails.

Aroleflin @ 7:16 PM PDT, Oct 15, 2008

Does anyone believe subprime mortgages, and the eventual derivatives based on them, would have been found general acceptance in the investment commnunity without the implicit or explicit gaurantee provided by Fannie and Freddie? When Congress used these pseudo banks to prop up pseudo loans they created a pesudo market that could only function under the assumption that housing prices would never appreciably decline. Congress made the bailout inevitable becasue they gauranteed these loans with the full faith and credit of the US, that is US taxpayers! They gambled and we lost.

Randall @ 3:26 PM PDT, Oct 15, 2008

I'm surprised noone mentioned the Taxpayer Relief Act of 1997 that granted a $250-500K capital gains credit for 2 years residence. Yet another government program whose primary effect is to inflate home prices, and encourage flipping. This law should be rolled back, or adjusted to 10 years, along with the home mortgage deduction (at least for second homes). Fannie, Freddie, and the rest should get out of the business of transferring bad loans, and limit themselves to helping low and middle income buyers who can afford a home, but can't save a 20% down payment. The government's only role should be enforcing truth in lending laws.

Richard Meyer @ 2:44 PM PDT, Oct 15, 2008

The Fanny and Freddie bailout is separate for the crisis that has enveloped the private financial system. The most obvious villains there are the Wall Street bankers who created the mortgage backed securities and their co-conspirators who gave those securities AAA ratings. The sub-prime loans, the liar loans, the pick-a-pay loans, all had the effect of making it easier to afford a more expensive house thereby creating the housing price bubble now bursting. Surely, the Federal Reserve Bank deserves some of the blame for letting interest rates stay so low for so long while this bubble built up.

Lester @ 2:09 PM PDT, Oct 15, 2008

This genesis of the meltdown started with the "Government is Evil" days of Ronald Regan. The easy way to reduce the cost of government was to reduce the quantity and quality of regulators and auditors. Virtually nobody was watching out the "The peoples" interest. With vodoo economics the trickle down theory all was going to be fine if the "Marketplace" could just take care of itself without the regulators interfearance.

Sr Tocino ex-banker @ 1:57 PM PDT, Oct 15, 2008

Regardless of who you want to blame, one fact is clear. Whenever our country has experienced a financial meltdown, be it the crash of '29, the savings and load crisis, or the junk bond fiasco, the culprit has been some Wall Street smart guy finding a way to do a (corrupt) deal without breaking the exisiting laws.

Michelle @ 12:45 PM PDT, Oct 15, 2008

It is ridiculous to say that a congress is not to blame for this mess. The Democrats (so called Champions of the people) would allow such atrocities to happen to low income home owners. What happened to personal responsibility. I was approved for a $300,000 home and I bought one for half that amount. Responsibility means not living outside your means. Period. The Democratic elitists need to get a grip and stop telling everyone it's the governments job to take of the individual.

C'mon Now @ 12:43 PM PDT, Oct 15, 2008

It was unbridled greed on ALL fronts, paid for by those who were responsible and lived within our means. Do a similar bank deal for owner occupied houses. Let them keep the house, but any equity in it goes back to the government when they sell. For speculators, you took a risk, you lost. Treat any forgiven mortgage as income and tax it. That should prevent this from happening in the future. Pull the pensions for all the politicians. The Republicans had 6 years of power to stop it, and the Dems had the last 2 years. No one did ANYTHING. They're all worthless idiots who fight for their party, not for the people. DON’T RE-ELECT ANYONE.

AP @ 11:51 AM PDT, Oct 15, 2008

What caused the financial collapse of the USA? What is needed is leadership that is known for “straight talk” and positive action, and certainly not more of the same from Obama and his crooked advisors (who really ought to be in prison).

tucanofulano @ 11:13 AM PDT, Oct 15, 2008

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