"No, Marco Rubio, government did not cause the housing crisis"

[Joy in Mudville]

huh?

Link?

.

Posted repeatedly throughout this thread and others. You need to actually read and seek out facts.

CRA Lending During the Subprime Meltdown
Elizabeth Laderman and Carolina Reid* Federal Reserve Bank of San Francisco

[SemiAuto]

2. The Community Reinvestment Act and the GSE’s affordability mission didn’t cause the crisis.

Many conservatives argue that the “affordability goals” of the GSEs, as well as the Community Reinvestment Act (CRA), which was created in the 1970s to make sure poor communities had access to credit, either directly or indirectly led to subprime loans.

Research from the Federal Reserve by Neil Bhutta and Glenn B. Canner (helpfully summarized in this Randy Kroszner speech), argues that the CRA couldn’t have been behind the subprime and housing bubbles. ”The very small share of all higher-priced loan originations that can reasonably be attributed to the CRA makes it hard to imagine how this law could have contributed in any meaningful way to the current subprime crisis.” Only six percent of higher-priced loans (their proxy for subprime loans) were extended by CRA-covered lenders to lower-income borrowers or CRA neighborhoods.

http://www.washingtonpost.com/blogs/...ousing-crisis/

Again, not exactly. Freddie and Fannie did their part in causing the problem but they were not the only players at the table.

Just as they cannot be blamed entirely for the problem they cannot be held blameless either.

[Joy in Mudville]

Again, not exactly. Freddie and Fannie did their part in causing the problem but they were not the only players at the table.

Just as they cannot be blamed entirely for the problem they cannot be held blameless either.

I think it is also important to understand that we saw two different, but obviously connected, things take place in the late 2000's. Yes, there was a housing bubble and it did pop. This alone would not have plunged the world into a financial panic of a type not seen since the Great Depression or the late 19th Century. There was also the unregulated, and by 2007, out of control derivatives market and it was this market, once it unraveled, that led directly to the financial crisis and a freeze in the credit market, and preciperated that bailouts and actions by the Fed that many here find so distasteful.

And again, it is also important to remember that while the GSE did buy some higher risk loans and also did buy some derivatives they began liquidating those holdings in 06, 07, and 08 and the loans they held were generally of higher underwriting standards than the true subprime loans being peddled by the independent mortgage companies.

[flyboy56]

I think it is also important to understand that we saw two different, but obviously connected, things take place in the late 2000's. Yes, there was a housing bubble and it did pop. This alone would not have plunged the world into a financial panic of a type not seen since the Great Depression or the late 19th Century. There was also the unregulated, and by 2007, out of control derivatives market and it was this market, once it unraveled, that led directly to the financial crisis and a freeze in the credit market, and preciperated that bailouts and actions by the Fed that many here find so distasteful.

And again, it is also important to remember that while the GSE did buy some higher risk loans and also did buy some derivatives they began liquidating those holdings in 06, 07, and 08 and the loans they held were generally of higher underwriting standards than the true subprime loans being peddled by the independent mortgage companies.

Countrywide Financial Corporation

Founded in New York four decades ago by Angelo R. Mozilo, a butcher’s son from the Bronx, and David Loeb, a founder of a mortgage banking firm in New York who died in 2003, Countrywide Financial Corporation became a $500 billion home loan machine with 62,000 employees, 900 offices and assets of $200 billion. As the mortgage market boomed beginning in 2000, no company pursued growth in home loans more aggressively than Countrywide.

[flyboy56]

Everyone jumped on the housing market bubble bandwagon!