One of the Barack Obama talking points is how the current administration has been asleep at the wheel and allowed this to happen. Actually, if Mr. Obama would do a little Google searching, or just read Mac Ranger's blog, he's know that it's Congressional Democrats who allowed this to fester to the point of a melt down.
Mac does impeccable research, and he dug up a 2003 article from the NY Times about a proposal by President Bush to create an oversight agency for Freddie Mac and Fannie Mae.
If you go click on my site meter you'll find at least 4 hits per day, some days many more of people searching for "Barney Frank Bailout", that would be Congressional Democrat Barney Frank of Massachusetts, who in the article from 2003 said there was no problem with Freddie and Fannie:
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''In March of this year, Rep. Frank came up with his own mortgage bailout plan, to help the people affected by the problems at Freddie and Fannie, and the general lack of oversight in the mortgage industry.
As history is showing us Republicans have been on the ball in the mortgage crisis for 5 years, and didn't just try one time to reform things.
In 2005 Chuck Hagel introduced S.190, "Federal Housing Enterprise Regulatory Reform Act of 2005", which would also have established oversite of Freddie and Fannie, and set capital reserve levels for them to maintain that would have prevented a large part of this crisis. It never made it out of committee, had it Senate Democrats would have killed it on the floor.
So why were the Democrats so against the idea of reform, when it's been obvious for 5 or more years that there was an issue? Simply put, fixing the mortgage process would have probably made it harder for low income people, one of their key constituencies, to game the system and buy homes. Frank said as much in the 2003 quote above.
The problem is that a lot of those people who were looking for "affordable housing" ended up with loans that went bad when they became unaffordable. The system allowed them to buy more than they could afford through ARM's and balloon loans.
They are no longer in their homes, and have had their credit ruined. The same folks who wouldn't allow reforms that might have prevented such things are now telling them, as always, that it's somebody elses fault.