Mortgage and Insurance

I see the argument a lot, especially in places like Yahoo Answers and blogs but I have never really seen it backed up with examples or evidence. I can only assume that people are referring to the wars in Iraq and Afghanistan and our current economic status. I just want to give some perspective that I hope people take into account before bashing me, and Bush, and republicans in general so that I can really get some answers. I am still undecided on who I am voting for and have never chosen who I vote for based on party affiliation. I consider myself level headed and I try to understand situations before reacting. So, here it goes.

President Bush took office on January 20, 2001. This was immediately following the dot-com bubble and the fall out created by it. Can’t blame that on him. Also, less than 8 months later 9/11 happened as we all know. Aside from the conspiracy theorists, you can’t blame that on him either. He immediately took action, as the nation wanted him to and not too long after Congress declared war in Iraq. Now, I THINK one of the things people blame on Bush is the whole thing about not finding WMDs in Iraq. I am fairly certain President Bush should not be held accountable for this. Everyone believed it due to faulty intelligence. I am not sure how that is his fault. In this argument I am also ignoring reports that we did in fact find WMDs in Iraq in the form of chemical weapons. Perhaps you can blame Bush for the fact that we have been in Iraq this long but in my humble opinion, destroying a country’s government then packing up and leaving isn’t exactly a good plan. We have to finish what we started and I think we will prevail in the end. We have to be patient, this is a new kind of war that has never been fought before. Keep in mind that in some months more people die in Detroit due to gang violence (one city) and die in Iraq due to the war (an entire country that is at war).

As for the economy, I think the argument is that Bush somehow got us into this mess because he has been president for the last 8 years. According to one of my economics professors the blame can’t be placed with any single person due to the fact that we got to this place by 30 years of deregulation of our financial systems. The guy is an economic historian and I believe him over most people who will respond to this post anyways, so lets assume that that part is not up for debate. Now in doing some reading I came across an article in the NY Times that leads me to believe if people do want to point the finger at one person for causing this Bush should not be that person, but Clinton should. The almost prophetic article starts out with the following.

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates — anywhere from three to four percentage points higher than conventional loans.

”Fannie Mae has expanded home ownership for millions of families in the 1990′s by reducing down payment requirements,” said Franklin D. Raines, Fannie Mae’s chairman and chief executive officer. ”Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.”

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980′s.

”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the governme
I just noticed my post got cut off….. oh well. Looks like people are still choosing ignorance. If you want to read the article go to NYtimes.com and search for “Clinton Fannie Mae” and read the September 30, 1999 article.