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In the late 90’s the Clinton Administration put pressure on lenders to offer riskier loans (sub-prime) to the poor, and those with poor credit, to increase home ownership. This was accomplished by lifting restrictions on Fannie Mae and Freddie Mac, allowing them to buy these risky mortgages on, what is called, the secondary market. By expanding the loans that Fannie and Freddie could buy, banks were able to extend more of these loans since they knew they could slough them off on Fannie and Freddie.
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Do People Give Ron Paul Enough Credit?
Posted by Sal Traina Categories: US Economy, Videos, Wall Street,
He predicted this mess we’re in now in 2003, almost three years before John McCain predicted it. Ron Paul is not my first choice for President, but he deserves way more credit than he gets. His strong suit is economics, and he could mop the floor with McCain and Obama on this subject.
On Sept. 10, 2003, U.S. Rep. Ron Paul, R-Texas, testified before House Financial Services Committee, which was holding hearings regarding special privileges extended to government sponsored enterprises (GSEs). Think Fannie Mae and Freddie Mac. In his testimony. Paul criticized such privileges in general and warned of the potential for disaster posed by government involvement with Fannie and Freddie specifically.
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