Mortgage Meltdown 2008

The Community Reinvestment Act of 1993 and HUD anti-discrimination rules required banks and mortgage lenders to give mortgage loans to unqualified buyers. Banks were audited by zip code to ensure that they were giving loans in minority communities. Jesse Jackson harassed and extorted the banks to give mortgages based on zip code. Obama was working as a lawyer to harass the Banks. Barney Frank ensured that Congress didn’t break ranks on the scam and blamed “greedy lenders”. 

In 1993 NAFTA (North America Free Trade Agreement) passed Congress and companies off-shored their manufacturing plants.  The decline in middle class jobs eroded household incomes. Predictably, the mortgage loans went in default.  But lenders had sliced good and bad mortgages up in pieces to unload mortgages as “securities”. Rating agencies fudged their data on these securities. Banks refused to do business with other banks and access to capital disappeared. The Federal Reserve printed $4 trillion and sent it to the banks to restore liquidity. Congress voted to bail out the Banks to restore the financial system.

The S&P 500 stock average opened in 2008 at 1447.16 and dropped to 752.44 in October 2008. The S&P 500 opened in January 2009 at 931.80 and closed in December 2009 at 1115.10. In 2013, the S&P had finally restored its value to 1462.42. Banks took the $4 trillion from the Federal Reserve in chunks from 2009 to 2014. Banks lent the Fed money to stock day traders who used it to buy stock. 401K participants continued to invest in stocks on the bet that stock values would eventually rise to overcome losses.

S&P January Open

2007 1416.60

2008 1447.16

2009   931.80

2010 1132.99

2011 1271.87

2012 1379.61

2013 1462.42

https://www.macrotrends.net/2324/sp-500-historical-chart-data

The Deep State Congress dodged the bullet for the Meltdown. Layman Brothers went bankrupt. Congress bailed out Fannie Mae and Freddie Mac, their federalized mortgage lending entities. Nobody mentioned the Community Reinvestment Act sabotage. Nobody proposed repealing the Community Reinvestment Act, but Banks quietly stopped giving mortgage loans to unqualified buyers.  Every time Congress attempts to advance “income equality”, they fail and create economic disasters. The laws of economics cannot be ignored. The only answer to income inequality is individual initiative, self-reliance, preparation, frugality, good decisions and hard work.

It is the responsibility of families to look after their own when family members need help and intervention, not the government.

It is the responsibility of US voters to demand the repeal of the Community Reinvestment Act and other boobie-trapped bad laws.

Norb Leahy, Dunwoody GA Tea Party Leader