[quote=SD Realtor]Please take a look at the items that you were very specific on mentioning. In any of those items does it imply that Bush was urging lenders to lend to people who could not qualify? I would agree that yes, a tax credit and down payment assistance is nothing that can help someone who cannot afford a home…
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I’m not sure that I’m understanding what you are saying here. Are you saying that DPA isn’t something that can be used to help a previously unqualified borrower get a mortgage? If so, I would disagree because lack of a downpayment was something that would have previously prevented a borrower from being able to get an FHA mortgage.

[quote=SD Realtor]
…I do not seriously believe that Bush did nearly as much damage as the other cast of characters I mentioned. You seem to conveniently omit them 100%. Furthermore you seem to conveniently NOT acknowledge the efforts made by Bush to implement reform on the GSEs.

Did that never happen. Did you see ANY of the people I mentioned above EVER try to implement reform in the GSEs or is that conveniently lost in your argument. [/quote]

I watched the YouTube clip. The Democrats shown in the clip were arguing for looser underwriting standards and less regulation of the GSEs while the Republicans shown appeared to be arguing for the opposite. I get it. However, what is not clear to me is who has (or had) the actual power to control what the GSEs did/do.

As near as I can tell, there seem to be 2 big issues with the GSEs: (1) capital cushion and (2) underwriting standards. As I understand it, the capital cushion merely affects how much capital the GSEs can use to buy mortgage-backed securities. The capital cushion does not limit the number of loans that the GSEs can guarantee. Thus, I feel that the underwriting standards are the most important issue in regards to the GSEs.

As Maxine Waters said in the clip, the GSEs were buying and guaranteeing 100% stated-income mortgages. In my opinion, this practice, and other lax underwriting standards, is what caused the world-wide housing bubble collapse. Once the GSEs started guaranteeing and buying these crappy loans, it meant that anyone (from Bear Stearns to Indymac to Countrywide to all of those smaller outfits that have already gone BOOM!) could write crappy mortgages and either sell them to the GSEs or get a GSE (government) guarantee. I don’t believe this housing bubble could have grown as large as it did without the GSEs standing behind so many dubious mortgages.

Who had the power to control the underwriting standards? Was it OFHEO? Since the OFHEO director is appointed by the President, if it was OFHEO who had the power to control GSE underwriting standards, then, in my opinion, the blame for this entire housing bubble can be laid at the feet of the President. If Congress had the power to control the GSEs’ underwriting standards, then the Congress (including all those Democrats shown in the clip) are to blame.

I’ve done some Web searches in an attempt to see if OFHEO has control over the GSEs underwriting policies, but I couldn’t find a clear answer.