The following is a condensation of a series from the Investor's Business Daily explaining...........

"What Caused the Loan Crisis":

1977: Pres. Jimmy Carter signs into Law the Community Reinvestment Act the foundation and cornerstone for the impending disaster.
The law pressured financial institutions to extend home loans to those who would otherwise not qualify.

The publicized premise: Home ownership would improve poor and crime-ridden communities and neighborhoods in terms of crime,
investment, jobs, etc.

The Results: Statistics bear out that it did not help.


How did the government get so deeply involved in the housing market?

Answer: Bill Clinton wanted it that way.

1992: Republican representative Jim Leach (IO) warned of the danger that Fannie and Freddie were changing from
being agencies of the public at large to money machines for the principals and the stock-holding few.

1993: Clinton extensively rewrote Fannie Mae and FreddieMac's rules turning the quasi-private mortgage-funding firms
into semi-nationalized monopolies dispensing cash and loans to large Democratic voting blocks and handing favors,
jobs and contributions to political allies. This potent mix led inevitably to corruption and now the collapse of Freddie and Fannie.

1994: Despite warnings, Clinton unveiled his National Home-Ownership Strategy, which broadened the CRA in ways
congress never intended.

1995: Congress, about to change from a Democrat majority to Republican. Clinton orders Robert Rubin's Treasury Dept
to rewrite the rules. Robt. Rubin's Treasury reworked rules, forcing banks to satisfy quotas for sub-prime and minority
loans to get a satisfactory CRA rating. The rating was key to expansion or mergers for banks. Loans began to be made
on the basis of race and little else.

1997 - 1999: Clinton, bypassing Republicans in Congress, enlisted Andrew Cuomo, then Secretary of Housing and
Urban Development, allowing Freddie and Fannie to get into the sub-prime market in a BIG way. Led by Rep. Barney Frank
and Sen. Chris Dodd, congress doubled down on the risk by easing capital limits and allowing them to hold just 2.5%
of capital to back their investments vs. 10% for banks. Since they could borrow at lower rates than banks their enterprises boomed.
With incentives in place, banks poured billions in loans into poor communities, often "no doc", "no income", requiring no money down
and no verification of income. Worse still was the cronyism: Fannie and Freddie became home to out-of work-politicians, mostly Clinton
Democrats. 384 politicians got big campaign donations from Fannie and Freddie. Over $200 million had been spent on lobbying
and political activities. During the 1990's Fannie and Freddie enjoyed a subsidy of as much as $182 Billion,
most of it going to principals and shareholders, not poor borrowers as claimed.

Did it work? Minorities made up 49% of the 12.5 million new homeowners but many of those loans have gone bad and the minority
homeownership rates are shrinking fast.

1999: New Treasury Secretary, Lawrence Summers, became alarmed at Fannie and Freddie's excesses.
Congress held hearings the ensuing year but nothing was done because Fannie and Freddie had donated millions to key
congressmen and radical groups, ensuring no meaningful changes would take place. "We manage our political risk
with the same intensity that we manage our credit and interest rate risks," Fannie CEO Franklin Raines, a former Clinton official and
current Barack Obama advisor, bragged to investors in 1999.

2000: Secretary Summers sent Undersecretary Gary Gensler to Congress seeking an end to the "special status".
Democrats raised a ruckus as did Fannie and Freddie, headed by politically connected CEO's who knew how to
reward and punish. "We think that the statements evidence a contempt for the nation's housing and mortgage markets"
Freddie spokesperson Sharon McHale said. It was the last chance during the Clinton era for reform.

2001: Republicans try repeatedly to bring fiscal sanity to Fannie and Freddie but Democrats blocked any attempt at reform;
especially Rep. Barney Frank and Sen.Chris Dodd who now run key banking committees and were huge beneficiaries of campaign
contributions from the mortgage giants.

2003: Bush proposes what the NY Times called "the most significant regulatory overhaul in the housing finance industry since
the savings and loan crisis a decade ago". Even after discovering a scheme by Fannie and Freddie to
overstate earnings by $10.6 billion to boost their bonuses, the Democrats killed reform.

2005: Then Fed chairman Alan Greenspan warns Congress: "We are placing the total financial system at
substantial risk". Sen. McCain, with two others, sponsored a Fannie/Freddie reform bill and said, "If congress does not act,
American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose
to the housing market, the overall financial system and the economy as a whole". Sen. Harry Reid accused the GOP
of trying to "cripple the ability of Fannie and Freddie to carry out their mission of expanding homeownership" The bill went nowhere.

2007: By now Fannie and Freddie own or guarantee over HALF of the $12 trillion US mortgage market.
The mortgage giants, whose executive suites were top-heavy with former Democratic officials, had been working
with Wall St. to repackage the bad loans and sell them to investors. As the housing market fell in '07, subprime mortgage
portfolios suffered major losses. The crisis was on, though it was 15 years in the making.

2008: McCain has repeatedly called for reforming the behemoths, Bush urged reform 17 times.
Still the media have repeated Democrats' talking points about this being a "Republican" disaster.
A few Republicans are complicit but Fannie and Freddie were created by Democrats, regulated by Democrats,
largely run by Democrats and protected by Democrats. That's why taxpayers are now being asked for $700 billion!!


If you doubt any of this, just click the links below and listen to your lawmakers' own words. They are condemning!

Fannie & Freddie: The Real Story Behind The Economic Crisis
http://www.youtube.com/watch?v=68D9XrqyrWo&feature=related

The origins of the 2008 financial crisis
http://www.youtube.com/watch?v=pIgqfM5C8lY

Community Reinvestment Act
http://www.youtube.com/watch?v=H9juJr8CSY4&feature=related

Postscript: ACORN is one of the principal beneficiaries of Fannie/ Freddie's slush funds.
They are currently under indictment or investigation in many states.

Interesting information - is it still Bush and the Republican's fault?

Or will the Democrats fix what they blame the Republicans for - either way we will still be paying for it!