Bump, OK, maybe you don't understand how desperate we are.
Sub-Prime Summary
Let me be quick to say first, I’m not trying to absolve the Republicans from blame at all, especially Bush II who all but sat on his hands while the “we gotta do something now” panic was going on. He and his (third!) Sec. of the Tres., Henry Paulson, late the CEO of Goldman Sachs (!!!), instigated the TARP bailout that should never have happened.
Re:
HUD Archives , which is Clinton’s “Partner’s in Homeownership” HUD program. “Amid the hoopla surrounding the partnership announcement, little attention was paid to its unique and most troubling aspect: It was unheard of for regulators to team up this closely with those they were charged with policing. (“Reckless Endangerment”, Morgenson & Rosner).
Some point out that there were plenty of prime as well as sub-prime mortgages that went under causing the crisis, but the run-up or bubble in housing prices was driven by the unsustainable surge in demand for housing due to the increase in the number of borrowers—most of the increase being sub-prime borrowers who now were securing loans with little or no down payment, no credit checks and no investigation of their ability to service the loan as had been done since banks started writing such mortgages. Then when the defaults started, the housing bubble burst leaving even larger numbers of prime mortgages underwater as the growing glut of supply drove prices back down to well below pre-crisis prices.
Some of the pressure to make these sub-prime loans was applied to banks under the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
which stipulated that a federally chartered bank wishing to expand must first undergo a review of its Community Reinvestment Act [CRA]compliance. (For the record, the Act was introduced in Feb and signed in Sept of ‘94, by Bill Clinton.)
But it was an ACORN led lawsuit against Citibank for racial discrimination, in which Obama participated (filed ’94 in Chicago, and settled out of court in ’98) which was the source for the real pressure, due to the size of Citibank. It was settled for the same reasons cited for the recent Wells Fargo settlement—cost of litigation, which is typical. That major ruling was used as a club by Clinton and Reno as a warning to all banks. As she stated, referring to a similar suit, “No loan is exempt (from similar prosecution), no bank is immune. For those who thumb their nose at us, I promise vigorous enforcement.”
One thing I keep asking myself following this calamity—where’s the inquiry, where’s the investigation, where’s the prosecution?
Citibank suit 
Jul 28, 2012 @ 10:07:13
