subprime_lending
See President Carter's Community Reinvestment Act and Clinton's National Homeownership Strategy to understand what caused the economic & housing crisis: Liberal politicians!
WASHINGTON (AP) - Federal regulators for the first time are laying out rules aimed at ensuring that mortgage borrowers can afford to repay the loans they take out.
Who pushed for these subprime mortgages? Democrats. Banks use to only lend to people who had good credit and real income to pay for mortgages. Had these new laws been in place under Clinton we would have never experienced the financial crisis or the housing crisis.
The rules being unveiled Thursday by the Consumer Financial Protection Bureau impose a range of obligations and restrictions on lenders, including bans on the risky "interest-only" and "no documentation" loans that helped inflate the housing bubble.
So, they finally admit what most of us knew? The subprime loans, to risky individuals, are what caused the mess. This is what typically happens with liberal "feel-good" policies.
Lenders will be required to verify and inspect borrowers' financial records. The rules discourage them from saddling borrowers with total debt payments totaling more than 43 percent of the person's annual income. That includes existing debts like credit cards and student loans.
CFPB Director Richard Cordray, in remarks prepared for an event Thursday, called the rules "the true essence of 'responsible lending.'"
Cordray is the illegal recess-appointment choice of Obama.
The rules, which take effect next year, aim to "make sure that people who work hard to buy their own home can be assured of not only greater consumer protections but also reasonable access to credit," he said.
Why next year and not immediately?
Cordray noted that in years leading up to the 2008 financial crisis, consumers could easily obtain mortgages that they could not afford to repay. In contrast, in subsequent years banks tightened lending so much that few could qualify for a home loan.
Thanks to liberal interference,  banks were forced to give loans to risky borrowers and their inability to pay off these mortgages caused the economic and housing crisis. Obama, as a Chicago lawyer, sued banks to force them to give these exact type of loans. Not to mention that Clinton's Attorney General, Janet Reno, threatened banks with investigations, and liberal screams of "racism,"  if they didn't ease credit for minorities. Politicians, particularly liberals, caused the financial and housing crisis, not the banks.
Then the government, along with Freddie and Fannie, packaged these risky mortgages and sold them as..wait for it..wait for it...mortgage-backed securities. Sound familiar? All these worthless mortgages were insured by...Freddie Mac and Fannie Mae..2 government sponsored entities (GSE). Investors thought they were wisely investing their money due to government fraud. Then when the buying stopped, the financial crisis was revealed.
Remember Barney Frank (D-Mass) and Democrats, claiming there was "NO CRISIS" and NO HOUSING BUBBLE with the two GSEs? Remember how Democrats covered for Freddie and Fannie by blocking regulations? Bush warned the Democrats, yet Democrats fought regulation.
The new rules seek out a middle ground by protecting consumers from bad loans while giving banks the legal assurances they need to increase lending, he said.
Clinton admits the subprime scheme exploded under his presidency...
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