I agree that the video greatly exaggerates the effects of the CRA and that it has a disgusting bias towards McCain, but I don't believe that all of its points are invalid.
First of all, there's nothing wrong with sub-prime mortgates when given to the right people. There's nothing wrong with sub-prime mortgages that aren't written in a way that force teh people not to be able to pay them off (most are).
You're right, but under the current system sub-prime mortgages given to those who cannot afford them have been made profitable. The Federal Reserve Board's policy of artificially low interest rates, as well as the backing of loans through taxpayer money, has a lot to do with this.
Second of all, Frannie and Freddie aren't the reason for the bad subprime mortgages, the originating banks are.
Like I said before, without those two institutions it would be incredibly unsound to issue said loans. One could argue that they didn't cause the problem, but they were certainly involved.
Third of all, the ties to obama are tenuous.
I agree, the bias is incredible. But does that make it wrong? I don't know if what the video says about him is true, but until those statements are disproven, I'm not going to declare him innocent.
Fourth of all, Republinuts need to stop blaming Clinton for everything wrong with everything. He did his best to fix the broken system he inherited, and mostly succeeded. Best president since Roosevelt imo. I didn't catch exactly what Clinton's reform was since alot of the "information" passed by so quickly to cover up it's crapiness.
To blame the Democrats for everything is absurd, but is there any evidence that they didn't help to fuel the fire?
Here are Clinton's reforms. A notable passage: "Related rule changes gave Fannie and Freddie extraordinary leverage, allowing them to hold just 2.5% of capital to back their investments, vs. 10% for banks, encouraging banks to make even more loans to low income communities, often with no down payment and little documentation. By 2007, Fannie and Freddie owned or guaranteed nearly half of the $12 trillion U.S. mortgage market."
Fifth of all, who stopped the Freddie Fannie legislation the first two times? The Democrats? Lol. The republicans were in control back then.
I'm not refuting this, but do you have a source giving the vote? The Democrats (obviously with some Republicans) could still defeat it.
Sixth of all, why was it not passed in 2007? Because the republinuts tacked on a bunch of crap.
Again, source? You spelled Republicans incorrectly again, by the way.
Seventh of all, another major component of all this that no one's talking about is that we built more houses than there are people, and new housing construction and subdivisions etc. is funded by loans.
Please elaborate on the effect of this, as it's new info to me.
And yes, de-regulation is the root cause. With regulation on the types of loans originating banks can offer we wouldn't have loans offered at low affordable rates that then skyrocket in after the first six months.
Your second assertion is correct, but not your first. The problem is not deregulation, it's deregulation without giving back responsibility to banks for their actions. Like you said, sub-prime mortgages are not evil, but they are devastating when given to the wrong people. There are two ways to do this: yours, regulation. This would mean no (or fewer) loans. The problem would be solved, but the people who could take on a sub-prime mortgages(and possibly only a sub-prime mortage) would be denied them. The other option: making banks take responsibility for their bad decisions, would also fix the problem, and would allow those people to get the loans they need.
