How did we get to this point? It all started with the Community Reinvestment Act. This piece of legislation was in the Carter Adminstration and was lightly promoted under George H.W. Bush,but given a top priority under Bill Clinton. The act ordered banks and savings and loans to extend mortgages to racial minorities. This idea with its roots in the "affirmative action" mentality led to very bad results. Way too many risky house loans were made under threat of sanctions. The banks knew you couldn't use welfare and unemployment checks to write good loans, but what were they to do?   Fannie Mae and Freddie Mac,came to the rescue with promises to back these loans. Then came the Wall Street investment bankers with another solution. We'll take your mortgages, securitize them, slice them into groups based on default risk, use our computer models to match default risk with yield and sell these packages to buyers around the world. Mortgage houses soon expanded these new rules to the entire marketplace. The rest is history. We call it the "Sub-Prime Crisis". Remember do hold grudges against the people who bought these loans for in many cases they were over sold and became victims of a group of elitist liberals trying to make themselves look good and gain some political capital. The culprits are the lawmakers who pushed this legislation such as Andrew Cuomo who investigated Fannie Mae for racial discrimination and pushed to have 50 percent of Fannie Mae and Freddie Mac's loans be made up of loans to low-moderate-income borrowers by the year 2001. Under Clinton threatening lawsuits demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage. Rep Barney Frank attacked, the White house chief economist, in Bush's first year in office (2001) for saying this issuing of loans to unqualified borrowers , was creating a huge risk for the entire financial system.This the same Rep. Barney Franks that has been denoucing the Bush years as causing the financial crisis; and is now one of the main players in putting together the bailout plan. These and many others have been involed in creating this mess namely the clout of the Democratic Party.
  In a September 25, 2008 interview on ABC's Good Morning America former President Bill Clinton said,"I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was president to put some standards and tighten up a little on Fannie Mae and Freddie Mac."

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