Check out this 2004 collection of sound bites, taking big bites out of Fannie Mae and Freddie Mac.
From Chicago's own WLS, 890-AM:
http://www.wlsam.com/goout.asp?u=/blog.asp?id=17549
Or to WLS's website www.wlsam.com and click on the link for the 2004 Congressional Hearing. Listen in about six minutes for information about the bonuses!
Why didn't Congress hit the Kill switch on this runaway train back then?
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How about the last 10 sec. where Bill Clinton tells us who is to blame "... the Democrats...”
This is a problem that started back under Carter and was magnified during the economic growth of the 90's. When banks and lenders are pressured to lower credit standards and Fannie and Freddie are guaranteeing securities backed by these risky loans; and investors are buying up these securities think they're a safe investment. Failure is eminent. A strong enough economy to support bad lending practices will never continue forever. With the fall of the dollar this past year, the weakness of these mortgages; and the subsequent securities, everyone who invested in these securities were left with valueless junk. With the dollar down, goods and products cost more to produce in the US; price of gasoline increasing, costs to ship goods and products increase; with costs going up in every sector, employers are looking (and taking) more and more jobs outside the US. Now people are struggling to make ends meet; And no equity left in their homes to borrow against. The house of cards comes tumbling down.
Why didn't Congress do anything? Who's going to kill something that is "putting a chicken in every pot". Everyone was profiting from writing these risky mortgages. Brokers from commissions, bankers from selling to Fannie and Freddie, Fannie and Freddie from selling to investors, and politicians get votes. Think about it. What politician is going to threaten this when every one of their constituents is able to buy their own home? It’s THE AMERICAN DREAM.
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