Congressional Report Blames the Government for the Mortgage Crisis
A new congressional report was just released and in what should come as a surprise to no-one, the government was found to be at fault for the current mortgage crisis. Freddie Mac and Frannie Mae encouraged people who could not afford to buy homes to buy them anyway. This was done to be “fair” instead of only giving money to those that could afford it.
In the short run, this government intervention was successful in its stated goal – raising the national home ownership rate,” says the report, the result of an investigation launched last fall by Republican members of the House Oversight and Government Reform Committee.
“However, the ultimate effect was to create a mortgage tsunami that wrought devastation on the American people and economy,” says the report. “While government intervention was not the sole cause of the financial crisis, its role was significant and has received too little attention.”
The report goes on to blame the policies of both the Clinton and Bush administrations. Both of them are long gone so this post will not focus on either of them. There is still one prominent member of congress who played a big roll in this meltdown and that is where this post will focus.
Other than in the blogosphere, Barney Frank has managed to skate through this crisis without a scratch and he is one of the biggest reasons that we are in the crisis in the first place. It is believed that the mortgage meltdown caused the slowing down of the economy and the recession and the massive growth in the list of expert credit repair companies, Barney Frank played a huge roll in implementing the plans that have lead to this recession.
Barney Frank is a dangerous man, he fought against passing tougher restrictions on Fannie Mae and Freddie Mac, he denied that there was a looming problem shortly before the meltdown began, and most recently we found out that he has not learned from his past mistakes. Just last month he asked both Freddie Mac and Fannie Mae to loosen up their lending restrictions that were imposed after the meltdown began:
The report comes after Rep. Barney Frank (D-Mass.) – who fought against regulation of the two quasi-public mortgage giants — and Rep. Anthony Weiner (D-N.Y.) wrote a letter in June to Fannie Mae and Freddie Mac calling on the GSEs to lower lending standards on condo buyers
One of the biggest problems that led to the crisis was lending restrictions that were too low and now Barney Frank is advocating the same type of policy that got us into this mess in the first place.
Barney Frank got a free ride through all of this but it is obvious to me that he needs to step down as Chairman of the House Financial Services Committee– for the good of the economy, and of the country.