You want to save the banks but not the homeowners?
If the banks hadn't have made the bad loans to the homeowners we would not be in this mess. Sure some people bought more house than they could afford but they couldn't have done that if the banks had not lent them the money. It was the responsiblity of the banks to make good loans. Now some seem to think we should just throw the homeowners to the wolves. It is not enough to just save the banks, we have to stop the foreclosures. The economy will not improve if the housing maket does not improve. I would rather see my tax money keeping people in their homes than keeping bankers on their yachts.
The following link may explain why the banks made so many bad loans. This explains the Community Reinvestment Act which may have played a part with the current problem. Some say it didn't have anything to do with our current situation, but I don't think it helped at all.
http://en.wikipedia.org/wiki/Community_Reinvestment_Act
The following is from the The New York Times. Aren't you glad that Barney Frank is handling the current problem?
Five years ago the Bush Administration attempted to head off a financial crisis that loomed ahead for Freddie Mac and Fannie Mae. As reported by the New York Times on September 11, 2003:
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac - which together have issued more than $1.5 trillion in outstanding debt - is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.
However, it was Congressional Democrats who fought tooth and nail to kill this new oversight.
Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
These two entities - Fannie Mae and Freddie Mac - are not facing any kind of financial crisis, said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.
Representative Melvin L. Watt, Democrat of North Carolina, agreed. I dont see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing, Mr. Watt said.
