New Study Finds Democrats Fully to Blame for Subprime Mortgage Crisis that Caused 2008 Financial Disaster

In his early activist days, Barack Obama the community organizer sued banks to ease lending practices.

State Sen. Barack Obama and Fr. Michael Pfleger led a protest against the payday loan industry demanding the State of Illinois to regulate loan businesses in January 2000. During his time as a community organizer Barack Obama led several protests against banks to make loans to high risk individuals. (NBC 5 Week of January 3, 2000)

Here’s something that won’t get any play in the liberal media…
A new study by the respected National Bureau of Economic Research found that Democrats are to blame for the subprime mortgage crisis.
Investor’s Business Daily reported:

Democrats and the media insist the Community Reinvestment Act, the anti-redlining law beefed up by President Clinton, had nothing to do with the subprime mortgage crisis and recession.

But a new study by the respected National Bureau of Economic Research finds, “Yes, it did. We find that adherence to that act led to riskier lending by banks.”

Added NBER: “There is a clear pattern of increased defaults for loans made by these banks in quarters around the (CRA) exam. Moreover, the effects are larger for loans made within CRA tracts,” or predominantly low-income and minority areas.

To satisfy CRA examiners, “flexible” lending by large banks rose an average 5% and those loans defaulted about 15% more often, the 43-page study found.

The strongest link between CRA lending and defaults took place in the runup to the crisis — 2004 to 2006 — when banks rapidly sold CRA mortgages for securitization by Fannie Mae and Freddie Mac and Wall Street.

CRA regulations are at the core of Fannie’s and Freddie’s so-called affordable housing mission. In the early 1990s, a Democrat Congress gave HUD the authority to set and enforce (through fines) CRA-grade loan quotas at Fannie and Freddie.

It passed a law requiring the government-backed agencies to “assist insured depository institutions to meet their obligations under the (CRA).” The goal was to help banks meet lending quotas by buying their CRA loans.

But they had to loosen underwriting standards to do it. And that’s what they did.

Republicans warned Democrats of the impending doom in 2004.

But Democrats wouldn’t budge.

Read the rest here.

Get news like this in your Facebook News Feed,
Gateway Pundit

Commenting Policy

Please adhere to our commenting policy to avoid being banned. As a privately owned website, we reserve the right to remove any comment and ban any user at any time.

Comments that contain spam, advertising, vulgarity, threats of violence, racism, anti-Semitism, or personal or abusive attacks on other users may be removed and result in a ban.

Facebook Comments

Disqus Comments

  • Pingback: New Study Finds Democrats Fully to Blame for Subprime Mortgage Crisis that Caused 2008 Financial Disaster « infowarsusa()

  • cavt

    Yes–and how many millions did the democrat leaders at Fannie and Freddie pocket?

  • Big Al

    One of my greatest frustrations is that republicans allowed the democrat propaganda machine to pin the whole crisis on “greedy bankers” while it was obvious to anyone that government policies laid the groundwork for the whole mess. Read Reckless Endangerment!

  • anybody that worked in a lending institution could have told you this. and yes people did say this but the democratic party-media complex ignored them and place the blame on their political enemies.

  • RL

    …and these are the thug cockroaches to whom we’re supposed to entrust registration of – or simply turn in – our last line of defense?

  • Pingback: Put Stakes In The Hearts Of Fanny Mae And Freddy Mac : The Other McCain()

  • JR

    Read the history of Penny Pritzker, Obama’s financier before his first presidential run, and you will see a history of a failure of her family’s Superior Bank of Chicago – long before the rash of bank failures that define the financial collapse. Her family managed to skim ten of $millions from the bank, then sent it into failure – leaving the U.S. government to cover the depositors. Was this the template for a way to pump many millions to the Democrat bankers?

    This whole debacle, along with how the Democrats and their media cohorts were able to define all this as ‘the failed policies of the Bush Administration’ is the single biggest injustice in U.S. political history.

  • squeaky

    [“The [sub-prime] financial engineering that created the Wall Street meltdown was developed by the Pritzkers and Ernst and Young, working with Merrill Lynch to sell bonds securitized by sub-prime mortgages,” Timothy J. Anderson, a whistleblower on financial and bank fraud, told me in an interview.] bundling bad mortgages in with the good supposedly with the backing of fannie and freddie. and she was almost commerce czar until the nano second media caught wind.

  • bear

    Rino republicans were complicit in these events.

    That, and the well-documented lack of regard for the truth displayed by the lefties mean that one more economic and political atrocity shall be unaccountable.

    Thanks, msm and rino whores.

  • David

    Mittens had many opportunities to educate Americans that walls st/capitalism wa not the root cause of the financial crisis. Rather it was democrat policies, cra etc

  • Jack

    Read Gretchen Morgenson’s book “Reckless
    Endangerment” for a great history plus she names names.

  • Earthmover

    You can prove these things are the fault of the democrats till you’re blue in the face
    and people still vote for them. Look at California, super majority in both houses,
    super financial mess, and they still love them democrats, unbelievable.

  • Bigkahuna

    I agree Romney had huge opportunity to hang this around dummycrats necks as did every republican running for office. Obama was waist deep in it as well. Why do republicans refuse to use the dems words and actions against them. It’s so effective even for moron voters ( liberals) to understand.

  • Thanks ACORN

    Because of these actions million of illegal aliens will not be able to settle in the U.S. because of the slowing economy…Thanks ACORN.

  • Detroilet Rising

    I like the dems’ policies and all of the flowering of cities these policies promote.

  • BurmaShave

    This is a very important study.

    I suspect that a similar report could be written on how the government, at the behest of the Progs (with lots of RINOs going along), so undermined and messed up our health care system that “ObamaCare was needed.”

  • here is clinton sec of H.U.D. telling all about affirmative action home loans and that more of them are likely to fail ….he is now the current Gov of New York

  • Pingback: New Study Finds Democrats Fully to Blame for Subprime Mortgage Crisis that Caused 2008 Financial DisasterPolitifreak()

  • Pingback: New Study Finds Democrats Fully to Blame for Subprime Mortgage Crisis that Caused 2008 Financial Disaster « U.S. Constitutional Free Press()

  • Blacque Jacques Shellacque

    Republicans warned Democrats of the impending doom in 2004.

    This was after Bush proposed one of the Democrats’ favorite pursuits – regulationto straighten out the GSEs.

  • JDR

    #20 BJS

    Republicans warned Democrats of the impending doom in 2004.

    This was after Bush proposed one of the Democrats’ favorite pursuits – regulation – to straighten out the GSEs.


    To which they have, as ever, responded, “Regulate US? No, no, no…. we regulate YOU!”

    Dems are immune to this “regulation” thing. Rules? They have no rules. They only have rules for everyone else. Dems are exempt now.

    Regulate Fannie and Freddie while Dodd and Frank and two dozen other congress-scum are reaping millions, tens of millions EACH, in direct contributions from Fannie and Freddie?

    No, no, no. We regulate YOU. We are your Government Betters, you peons.

  • Pingback: New Study Finds Democrats Fully to Blame for Subprime Mortgage Crisis that Caused 2008 Financial Disaster | Born Conservative()

  • Patty

    This is what I call, a day late and dollar short.


  • Patty


    Bill Ayers: Left Must Utilize Its ‘Absolute Access’ To America’s ‘Classrooms’ Former President Obama grillout buddy and self-described communist Bill Ayers came out this month to discuss how leftists can mold America to their liking: through access to schools. Ayers is famous for, in 1969, helping found Weather Underground, a self-described communist revolutionary group that bombed public buildings including police stations, the Pentagon, and the U.S. Capitol to provoke social unrest. Ayers also directed a school that allowed no grades or report cards in an effort to discourage competition.

    A 1973 book Ayers coauthored was dedicated to Sirhan Sirhan, the convicted assassin of Robert Kennedy. He has spoken and written frequently on education and assisted former Chicago Mayor Richard Daley in reshaping the city’s schools in the 1990s. Sol Stern has written in City Journal: “Calling Bill Ayers a school reformer is a bit like calling Joseph Stalin an agricultural reformer.”

    In this video, obtained by, Ayers gives leftists advice on how to change the country from “movements on the ground.”

    “If we want change to come, we would do well not to look at the sites of power we have no access to…” Ayers says. “We have absolute access to the community, the school, the neighborhood, the street, the classroom, the workplace, the farm, the shop.”

  • lynno

    To many open hands, bully the banks, bully the People of Ameica, We the People are not percentages. Where this administration is taking us is criminal, and scary. Duct and cover the commies are coming. I am starting to see the results of their indoctoration in the schools, hand out, the government wil take care you. Work hard young Americans you will have alot to payoff for the takers.

  • Tabby

    Man I wish this link was around day before yesterday. Had an idiot lib trying to tell me that “it’s been debunked the recession wasn’t caused from the housing crisis. It didn’t eddect the economy.That’s just right wing propaganda”. etc. etc. (You guys know how they are.)
    So I had to copy & paste this massive explanation that breaks down the timeline with exact dates & who voted for what etc. Just a huge overview proving he was wrong.
    I just don’t like doing that when I’m in a chat because I don’t wanna be “that guy” (or girl) that hijacks the thread! Good way to tick off an entire forum.
    Of course either way the moron probably wouldn’t have believed me since logic & reason are 2 things these people don’t possess & things like facts mean nothing…But it would have made answering him faster / easier! 😉

  • Tabby

    eddect = effect (looks like I need to start getting some actual sleep at night)

  • Lady Liberty

    Democrats have been having their cake and eating it too for years!

    Report: Cronyism, political donations likely behind Obama, Holder failure to charge any bankers after 2008 financial meltdown

    CRONYISM REVEALED: Goldman CEO Lloyd Blankfein’s Criminal Defense Attorney Is Eric Holder’s Best Friend

    CRIMINALLY CORRUPT – Eric Holder, Top DOJ Lawyers Were Partners With Big Banks (Reuters Investigation)

    Barack’s Wall Street Problem is Now America’s

  • Pingback: New Study Finds Community Reinvestment Act Led To Mortgage Meltdown And Financial Crisis | The Lonely Conservative()

  • Pingback: Monday morning links - Maggie's Farm()

  • buddy larsen
  • buddy larsen

    PS on my #31. If you read the Reuters story I’ve linked, or if you don’t, either way, please please scroll down into the comments and locate a comment by ex-DoJ Abigail C. Field.

    Then go to her website, and save the URL for later (It’s Christmas!) her deeply detailed whistleblowing on her former bosses, and the entire larger gang which operated the other end of Obama’s ACORN street theater.

    Abigail’s article looks to me like something that may not be up forever –get it now –it’s original research, which i found thanks to Maggie’s Farm pointing me to Gateway, which triggered a memory of the Reuters, which since i’d first read it, has added the comment and URL from Abigail C Fields.

  • Pingback: New Study Finds Democrats Fully to Blame for Subprime Mortgage Crisis that Caused 2008 Financial Disaster | The Gateway Pundit « Leftoutinamerica's Blog()

  • Pingback: New Study Finds Democrats Fully to Blame for Subprime Mortgage Crisis that Caused 2008 Financial Disaster | The Dubuque Town Crier()

  • arturohbelano

    You know that Freddie Mac and Fannie Mae had almost no responsibility in this, right? They had approximately 16% of all subprime debt in 2007.
    Do Republicans who wrote and passed the repeal of Glass Stega, which de-regulated the financial service industry, have no responsibility.
    Both parties are responsible, you partisan hack. What a ridiculous website.

  • mom

    Arturo….no Fannie and Freddie had level 1,2and3 confirming loans….their system of underwriting that basically squeezed a subprime loan into a A paper dress to be sold in the market. If you sell something as a A paper lian and it turns out that it should have been priced as a alt a or sub prime you will eventually get burned.

  • Jay Santos

    Bill Clinton signed the repeal of Glass Steale Act. The buck stops with him. He could have vetoed its repeal. Instead his signature started the domino effect.

  • JCSR

    Wrong Jay, the whole act was not repealed, only the part of it that prevented investment banks, insurance and securities companies from doing business with the regulated banks or consolidating with them. And please remember that this was done with the Graham-Leach-Bliley Act of November 1999 which was drafted by Republicans. Alan Greenspan repeatedly stated during the 90’s that there was no regulation of derivatives markets necessary. Also, remember that when things were getting ugly it was a host of government entities, the FDIC, the SEC, and many others that failed to regulate the financial markets in the years leading up to the disaster. Also remember that it was Wall Street and their issuance of CDO’s, Credit DEfault Swaps and many other derivative instruments backed by risky mortgages that inflated the housing markets. It was Wall Street, fanned by the government’s lack of regulation that created the bubble that busted. Besides, why was the SEC and the credit rating companies giving AAA grades to all those CDO’s and highly toxic instruments if they were so backed by subprime mortgages???. Also, Fannie and Freddie mortgages were the least affected by the whole fiasco. Read the commission’s report to learn what caused it.

  • jm313

    Your right and during the vote in Congress a ton of Democrats supported it.

  • jm313

    Fannie and Freddie were a big key enabler of the crisis. They absolutely are a cause of the crisis.

  • SonoranSnoozer

    Democrats love to blame “deregulation” for the housing bubble rather than the weak underwriting standards ushered in by the CRA. The scary thing is, since Democrats are living in denial, we could have another housing bubble and crash.

  • democrat CockRoach

    Just send billy and barry back up on the stage to TROT and PRANCE around for the DIMBOS and their little eyes GLOSS over while the corruptos LIE through their teeth and then SKIM off the DIMBOS home equity and leave them underwater. Then the DIMBOS run out and VOTE for them AGAIN and AGAIN and AGAIN and BLAME the GOP for all their MUCK.

  • Kevin Carroll

    BS, the root cause was the destruction of lending standards dictated by the democrats. Everything goes back to that.

  • easy

    Do you need a Loan?
    Are you looking for Finance?
    Are you looking for a Loan to enlarge your business?
    I think you have come to the right place.
    We offer Loans atlow interest rate.
    Interested people should please contact us on
    For immediate response to your application, Kindly
    reply to this emails below only.
    ([email protected])

    Please, do provide us with the Following information if interested.
    1) Full Name:………
    2) Gender:………
    3) Loan Amount Needed:………
    4) Loan Duration:………
    5) Country:………
    6) Home Address:………
    7) Mobile Number:………
    8)Monthly Income:…………………
    )Which site did you here about us…………………
    Thanks and Best Regards.
    ([email protected])

    www.([email protected])

  • democrat CockRoach

    And democrats are actually the ones who DEREGULATED but notice they blame Bush for that.

  • joevet

    Arturo, you tool YOU call others partisan hacks? Seriously?? Project much (rhetorical)?

  • Crakalakin

    Bottom line.

  • KenPrescott

    Fannie Mae and Freddie Mac should not have held one damn penny’s worth of subprime.

  • Iceneedle

    So are you saying when there was a Republican majority in the House and Senate, they couldn’t repeal this banking nightmare? Or are you saying the Republicans couldn’t see the impending consequences by not acting?

  • Tim Bates

    I totally don’t believe this predatory loans would not have been given to home buyer that were not financially able to afford if the Glass – Steagall Act had not been repealed.

  • Red West

    Simple rule to follow… “if not but for”… learn it in the first weeks of contract law. What caused the crash? Loans being defaulted on… and that rippled up the chain as those bad loans had been commoditized. Now if the holders of those loans hadn’t defaulted, then we wouldn’t be sitting here having this conversation. Why did they default? Because they were granted loans they NEVER should have been given… were not qualified to handle. And why did that happen? CRA. Democrats. They were warned it would blow up, and Barney Frank stood on the floor of the House and told the world there was no risk of a housing bubble. Pop. Dem POTUS set the bomb… Dem policies fueled the fire over decades… Dem politicians turned away the fire marshal when they were warned it was going to burn down, and then blame Bush when it all comes burning down around them. Freakin’ priceless.

  • Red West

    & if they hadn’t, there’s no way banks could’ve complied with the stricter CRA rules. They mandated bad policy, then put additional bad policies in place to enable it.

  • Red West

    Would not have been given? They were REQUIRED to issue under CRA. Are you under the impression banks make a practice of giving away money to bad risks? Try and get a car loan with bad credit. A business loan. Not going to happen. Only reason they allowed it to happen in mortgages is because the Democrats and Cuomo’s / Clinton’s HUD told them they HAD TO… and then promised to absorb all the risk if things went badly. Unfortunately, when the GOV assumes all the risk, what they’re really doing is placing it all in the lap of the taxpayers. The rest is history.

  • CFL68

    What misleading garbage.

    GOP ideologues are trying to shift blame to CRA, when CRA applicable loans only represented about 6% of subprimes.

    GOP is flat out lying. Again. Manipulating people.

    Try digesting this: