Placing The Blame For The Foreclosure Crisis
September 24th, 2008
There are many pundits with many views – all trying to pass on the blame game. Some place the blame for the foreclosure crisis on Wall Street while others opine strongly that the roots go back to the policies of the Democrats in the Clinton era. Today the load of the blame has to be borne by Barack Obama and his buddies. The Clinton rule had come up with the idea that everybody with a pulse was entitled to be given a mortgage even if they did not qualify for a house loan.
Once upon a time when thinking was saner the banks demarcated certain regions as no-loan areas. These were the areas where people with low and middle income resided. Advancing loans to them was sure to invite trouble. Foreclosures would soon follow. But the Clinton group felt that banks should be more generous and not confine their lending activities to those who could afford mortgages. With all holds withdrawn everybody, including dubitable speculators could run off with a loan.
Into the scene entered the semi government financial bodies – Fannie Mae and Freddie Mac. They poured money into the system by purchasing mortgages from other banks. As a result their portfolio got bloated up with billions and billions of risky mortgage contracts that banks had taken and then dumped on them.
The Enron fiasco pales into insignificance when compared to the scandal of Fannie Mae and Freddie Mac in the middle of this raging foreclosure crisis. In the case of Enron the accused were jailed. But in this instance of Fannie and Freddie the culprits just walked off with millions in their pockets. The duo can be held responsible for the collapse of Lehman Brothers. Fox News reported that Fannie Mae and Freddie Mac helmsmen spent huge amounts for lobbying and keeping regulators from sniffing around.
The Center for Responsive Politics alleges that three senators who benefited from Fannie and Freddie capers were Democrats. Of these the second ranking figure was Barack Obama. Obama has only been in the senate seat for four years but he has managed to overtake his colleagues John Kerry and Chris Dodd.
Fox is specific in its accusations. Franklin Raines, budget director of Clinton era pocketed $50 million. Jamie Gorelick of the justice department during the Clinton days wiped off $26 million when she worked for Fannie. Jim Johnson of Obama’s search committee netted millions while overseeing operations of Fannie.
- Florida Courts are Overwhelmed by Foreclosure Cases as Justices Mull Over Solutions
- Spurt in Sales of Foreclosed Properties
- Foreclosure Climate Changes Spirit of Competition to Cooperation Among Contractors
- Bouncing Cheques Issued by Title Companies Lead to Foreclosures
- Increase in Foreclosures Prompting Class Action Legal Suits
- Avoiding Foreclosures by Walking Away From Loans are not Without Problems
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