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Greg

Can I ask a question Peg, and most of this was addressed earlier, but the question is, what steps did this administration use to increase home ownership? If you answer relaxing lending regulations, lack of oversight which allowed those to get mortgage's that they never should of gotten, then you would be correct. On this point Krugman is right, and I suspect it is something you will not address at any length or thoroughness.

Truth is I have already debunked the majority of this post in the past. This notion of just increasing home ownership to increase home ownership was a significant reason behind the mortgage crisis. As I posted before

"Let's examine how HUD was run under another Bush lackey Alphonso Jackson. In late 2006, as economists warned of an imminent housing-market collapse, Jackson repeatedly insisted that the mounting wave of mortgage failures was a short-term "correction". Jackson continued to pushed for legislation that would make it easier for federally backed lenders to make loans to risky borrowers. Jackson issued a rules that were criticized by law enforcement because it could increase the difficulty of detecting and proving mortgage fraud.

Jackson also ignored warnings from within his agency HUD whose inspector general told Congress that some of the secretary's efforts were "ill-advised policy" and likely to put more families at risk. During his ill-fated time as HUD Secretary Jackson in speeches, urged loosening some rules to spur more home buying and borrowing. In June of 2007 Jackson was convinced that the market will soon begin to soar, he also told the press that he had no specific laws to recommend to prevent a repeat of the lending abuses that caused the mortgage crisis."

So history and facts are pretty much on Krugman's side, so please are you able to address any of this? No where in your post do I see you list the increased number of foreclosures, the amount of foreclosures that are close to equal to that of the great depression. Why not compare these rates with those that were seen during the Clinton years, or during the Great Depression? Probably because if you did that, your thesis would fall apart.

Finally, and this is to anyone who might want to learn more about how this all happened, and to those with an open mind. Recently This American Life ran a fantastic story on how all of this came about. I would suggest to anyone who might want to learn more about this, and those with an open mind to check it out. It might offer some insight into this issue more that the ideology of the Right Wing Spin Machine, because it deals with facts, something that seems to always be in lacking in Republican talking points.

The Giant Pool of Money
http://www.thislife.org/Radio_Episode.aspx?sched=1242

A special program about the housing crisis produced in a special collaboration with NPR News. We explain it all to you. What does the housing crisis have to do with the turmoil on Wall Street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money.

Host Ira Glass talks with an NPR business and economics correspondent about two gatherings he attended—one at the Ritz Carlton and one at a community college in Brooklyn. The first was an awards dinner for finance professionals who created the mortgage-based financial instruments that nearly brought down the global economic system. The other was a non-profit conference for people facing foreclosure. Ira explains that today's show lays out how the finance guys and the people facing foreclosure are connected by a chain of middlemen, and that together, they all brought about the current housing and credit crisis.

Then This American Life producer Alex Blumberg teams up with NPR's Adam Davidson for the entire hour to tell the story—the surprisingly entertaining story—of how the U.S. got itself into a housing crisis. They talk to people who were actually working in the housing, banking, finance and mortgage industries, about what they thought during the boom times, and why the bust happened. And they explain that a lot of it has to do with the giant global pool of money.

Peg

Sorry, Greg. I don't begin to be a partisan as you (and Krugman) are. Some of your "facts" are not facts at all.

In the last decade, more efforts were made to make home ownership open to more individuals - but - people who were capable of purchasing. I would think that you of all people would be glad to see restrictions, unfortunately sometimes due to someone's race, being torn down.

Why we are currently having some of the difficulties we are is a function of many factors. Many people and institutions are culpable for the problems.

If you wish to look back at what happened and why - that's one thing. If you want to search for solutions to correcting what is wrong - great.

But - if you are only interested in using the Bush administration as a punching bag; sorry. Not interested.

Greg

I beg to differ with you Peg, the facts are not partisan, they are simply the facts. And as usual you offer no facts to dispute anything I said or claimed. Every point I have made is factual and can be sourced. Go back and check the record, everything I posted about Jackson and HUD are correct. They cannot be factually disputed, so where have I erred? With all you state, can you source anything factual to your point. Please do not give me some right wing spin, I would like to see some facts to back up what you say.

Next truth. In 2002 President Bush when introducing his “Homeownership Challenge”, he and Alphonso Jackson a set of policy initiatives that were supposed to sharply increase homeownership, especially for minority groups. I will admit that it is true that home ownership rose as the housing bubble inflated, temporarily giving the Bush Administration something to boast about. But this boom has now plunged. Today, the percentage of American families owning their own homes is no higher than it was six years ago, and it’s a good bet that by the time Bush leaves the White House home ownership will be lower than it was when he moved in. So if home ownership will be lower when he leaves office, would you still label this a success??

Now if you are going to go down the road of blaming those homeowners, you also need to examine those that offered those loans at this time, the reasons why they offered these loans, and what they stood to profit from these loans. The Wall Street Journal (owned by liberal hawk Rupert Murdoch) found that of more than $2.5 trillion in subprime loans made since 2000 shows that as the number of subprime loans mushroomed, an increasing proportion of them went to people with credit scores high enough to often qualify for conventional loans with far better terms.

This finding will no doubt debunk your sure response and that of conservatives who claim that the sub-prime mortgage crisis revolves around borrowers with sketchy credit who couldn't have bought a home without paying punitively high interest rates.

In 2005, during the height of the sub-prime boom, the study found that borrowers with decent credit scores got more than half - 55 percent - of all the subprime mortgages that were ultimate packaged into securities and sold to investors. By the end of 2006, this increased to 61 percent.

So someone might ask the simple question as to why would all these people signing up for sub prime loans who didn't need them? The answer is fairly simple. Mortgage companies used hard sell techniques and mortgage lenders had compensation structures that rewarded brokers for persuading borrowers to take a loan with an interest rate higher than the borrower might have qualified for. What resulted from this was that these better-off borrowers may end up serving as a sort of "shock absorber" for the current mortgage crisis, since they are more likely than traditional subprime borrowers to survive the double whammy of declining home prices and adjustable rate mortgages soon due to reset at higher interest rates. Yet this doesn't erase the fact that they got taken for a ride by mortgage lenders with questionable practices, and the American economy went with them.

While these practices flourished under the Bush Administration and the Republican mantra of 'free market, and limited rules and regulation', the deregulation started under President Clinton, who spoke about this yet stopped when it got to the point where the deregulation started. Does any of this make Bush evil? No, I personally think it was a way to keep consumer consumption up, and to make the economy seem like it was better that it actually was.

Just to prove I am not a partisan hack I will link the Wall Street Journal story:

Subprime Debacle Traps Even Very Credit-Worthy
http://online.wsj.com/public/article_print/SB119662974358911035.html

Just a few facts, factually prove me wrong if you can.

Peg

I must take continuing education classes every year. Each year, at least one hour must be devoted to fair housing; learning what we can and cannot do to better guarantee that a variety of minorities are not denied their rights as both homeowners and renters.

In addition, I have taken courses on promoting home ownership to racial minorities. This was not some "scheme" or "smoke and mirrors." Many members of minority groups were less educated about how home ownership works - and a variety of people working in jobs needed to purchase were not as welcoming to minority customers as they should be.

So - a number of steps have been taken to help people get educated about how to buy, to do what is possible to lessen discrimination - and it worked. No, not every person of every minority had a house. But - the percentages of those who could and did surged.

Why we've had the crisis of the last few years is complex and multi-layered. It is not just the fault of greedy and immoral lenders, nor hedge fund managers. It is easy in retrospect to look and say "this is why it all happened". But, it was a convergence of many factors - not the least of which was people making stupid choices and not thinking through what they were doing with their own lives.

Is it the fault of a Senator if someone on welfare takes their welfare check and purchases heroin with it instead of food for their children? I think not.

My point is that it is not the fault of our government if real estate agents, lenders, speculators and buyers either acted illegally or stupidly - and then found themselves in financial trouble.

Greg

Interesting in how you still have not pointed out anywhere where I got my facts wrong or incorrect. So seeing that you were unable to do so, we will just assume that that facts I used where correct. I am by no means Mr. No It All, but if you could come up with some facts that might change my mind I would be open to view them and take them in. But I insist on facts, and not ideology or right wing mantra. Also you write about minorities and discrimination and the classes you take, but so what? All of this came primary because of the Fair Housing Act of 1968? If I was a partisan hack I would offer up some points like these that occurred under the Clinton Administration:

Assisting Families with Housing Vouchers. Congress approved the President's full request for 50,000 new vouchers exclusively for people who need housing assistance to make the transition from welfare to work.

Homeownership Is Up. There are more than seven million new homeowners since the President took office. African American homeownership has increased 20 percent with 974,000 new African American homeowners since the first quarter of 1994.

Helping More Families Become Homeowners with the "Play-by-the-Rules" Homeownership Initiative. The FY99 budget included $25 million for the Neighborhood Reinvestment Corporation to start this new initiative that will make homeownership more accessible to families who have a good rental history but have difficulty purchasing a home; 10,000 lower-income and minority families who are currently renting will benefit from this initiative.

Expanding Low-Income Housing Tax Credit by 40 Percent. In 1993, President Clinton fulfilled hispromise to permanently extend the Low-Income Housing Tax Credit, spurring the private development of low-income housing and helping to build 75,000-90,000 housing units each year. President Clinton has proposed to expand the credit by 40 percent. Over the next five years, this expansion would mean an additional 150,000 to 180,000 quality affordable rental units.

But I am not a hack, so we will not even delve into those facts. But when we look at minorities and home ownership here is something you still have no chose to address. As I previously pointed out:

In 2005, during the height of the sub-prime boom, the study found that borrowers with decent credit scores got more than half - 55 percent - of all the subprime mortgages that were ultimate packaged into securities and sold to investors. By the end of 2006, this increased to 61 percent.

So if the majority, that is more than 50% had met requirements for better loans, why were they steered to these other loans? Because loan brokers got more money for steering people into these other loans. Why? Because they included penalties for paying off loans early, and in many times forced homeowners to come back for another loan when the higher interests rate kicked in. Sort of like the way drug dealers work (I assume from watching some TV). Also as stated above, these mortgage's were packaged and sold off. So when a bank is not going to hang on to the loan for a long term manner, and instead sell it off to someone else, how much are they worried about the risk or the anything else about the loan? If the loan is going to be flip to Wall Street, why worry about who or how the loan will be paid off. I think this is probably why there were 23 dead people who were allowed to get a mortgage in the state of Ohio. Just as Enron, Worldcom, and Bear Sterns there was rapid fraud and misdoings. Little to no rules, regulations, and oversight where the cause. And again I will state to show that I am not some partisan hack. This started under the Clinton Administration, yet it has flourished under the Bush one.

Once again if you can list some facts to change my mind, I am open to seeing them and reading them. But by stating I have my facts wrong, and never factually disputing any of them, I am a little puzzled.

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