Posted by
Always To The Right on Thursday, October 09, 2008 7:03:08 PM
"But here’s what McCain didn’t talk about. Obama went on
to say that greed changed all of that. Certain lenders and brokers,
quote, began to lower their standards, Obama said, and borrowers —
well, they ended up in places they could never afford. So Obama
definitely spoke out against the practice."
Well, that’s exactly what subprime lending was. The entire subprime lending structure intended to get loans to people who didn’t qualify for them by lowering lending standards.
In fact, thanks to the CRA and groups like ACORN, lenders got accused
of racism if they didn’t lower their standards — and so
long-established prerequisites for mortgages like income standards and
down payments disappeared.
And where did the greed arise? It came from Congressional mandates
to have Fannie Mae and Freddie Mac buy up subprime loans to provide
short-term profits to the lenders lowering those standards. Who pushed
those mandates? Obama’s own party. Who accused regulators like Armando
Falcon of racism for blowing the whistle on the bad financial decisions
at Fannie and Freddie resulting from the massive underwriting of these
loans? Obama’s own party.
Cho needs a fact checker of her own. McCain’s point was perfectly
valid. The financial crisis came from government deliberately
distorting the lending market to push people into subprime loans who
could not afford the houses they were buying — and the advocates of
that policy counted on “greed” to make it work. In fact, they built it into the program.