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.

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  • 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!

  • http://none tommy mc donnell

    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?

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  • 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.”

  • Aggie95

    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

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  • 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.