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GOP House Oversight Committee mortgage crisis review

July 7, 2009 at 10:37 am by Steve McGough  
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Who says the Republicans in Congress are not doing anything? Even though you could call it old news, members of the GOP House Oversight Committee put together a report in review of the Fannie Mae and Freddie Mac diabolical.

So why is this important? As Michelle Malkin reminds us, Rep. Barney Frank (D-Mass.) wants to proceed down the same path as before. I guess he has not learned anything from history. On July 2 I wrote about Frank using the “profits” from the bail out for his own personal slush fund to fund as-yet unfunded federal housing entitlement programs.

The Hill reports that Republicans are attempting to refocus the blame back onto the governments direct involvement and pressure on the government-sponsored enterprises (GSEs) of Fannie and Freddie.

The report continues the theme of Republicans seeking to pin the housing crisis on Fannie and Freddie, now completely owned by the government. The GOP sees the two mortgage giants as having pumped air into the housing bubble by offering and subsidizing high-risk loans in an effort driven by Democrats and the Clinton administration to increase homeownership, particularly among minorities and low-income households.

To be fair, the Bush administration in my opinion did not do enough to stop all of this from happening, and publicly President George W. Bush was promoting home ownership as well. We’ve covered all of that over and over…

I’ve uploaded the full report – it’s only 26 pages or so – for your convenience. Highlights include…

  1. Political pressure led to the erosion of responsible lending practices
  2. Lower down payments led to housing prices that outpaced income growth
  3. Members of an “affordable housing” coalition shared profits with political allies to help legitimize their business practices
  4. The Government Sponsored Enterprises led the way into the housing crisis

Nothing that we have not already known is in the report, therefore the only reason for spending the time and money on the thing is to prevent it from happening again. With Frank on the hunt to spend more cash on pet projects, it’s good timing.

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Responses to “GOP House Oversight Committee mortgage crisis review”
  1. Dimsdale says:
    July 7, 2009 at 9:47 pm

    “As Michelle Malkin reminds us, Rep. Barney Frank (D-Mass.) wants to proceed down the same path as before. I guess he has not learned anything from history.”

    Oh but he did. He learned that he got away with it scot free once, and in the Democrat dominated DC culture of corruption, he is free to get away with it again. Dodd the Fraud, after blowing considerable money from “donors” to rebuild his reputation, will likely get reelected by soothed and subdued Connecticut voters, and be back to work, furnishing his new “cottage” on the Irish shore (dare I say dacha?)

    By the way, the WSJ just had an article on this, titled “New Evidence on the Foreclosure Crisis: Zero money down, not subprime loans, led to the mortgage meltdown.”
    (http://online.wsj.com/article/SB124657539489189043.html#mod=djemEditorialPage)

    No skin in the game means no sense of responsibility; no positive equity means they had nothing to lose. To them, it was like paying rent. They just walked away.

    • skepticalcynic says:
      July 8, 2009 at 11:25 am

      People walked away NOT because they put no money down, they walked away because they had nothing to lose. If they had a no money down loan and had assets that were vulnerable I’m sure they would think twice.

      Individuals walk away if there is nothing to lose, as do big corporations.