Thursday, April 09, 2009

Bipartisan Cluster Fuck

I find it amusing that republicans I talk to tend to blame the entire housing crisis on the democratic decision of Bill Clinton to end redlining. Yes the decision to lend to less then credit worthy borrowers to ensure the home owner experience played a part in the housing collapse. However it was only a passive measure. It required lender to lax the standards for people that sought them out.

The second part of this mess turned the passive measure to an active ingredient in the collapse. When the republican George Bush passed the new bankruptcy laws that allowed credit companies to collect judgements for non-securitized debt. This turned lenders from passively having to accept non-credit worthy loans to actively seeking to make those loans\credit offers since they now had a way to collect payment even if the borrowers defaulted.

Borrowers who now find themselves in credit card trouble have to pay the credit card companies before they pay their mortgages increasing the number of defaults exponentially from what they should have been.

It really is a two party fuck up and both measures should be repealed.

1 comment:

Rocketstar said...

yeah, they also forget that without the Mortgage Backed Securitie FRENZY running wild along with the INSURING of those MBS's with Credit Default Swaps, this would have never happened. We may have seen a lot of foreclosures but our financial system would not be in this mess.