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Originally Posted by powerclown
Poppycock. It was Christopher Dodd and Bawney Fwank, both Dems, who refused Bush administration requests to set up a regulatory agency to watch over Fannie Mae and Freddie Mac, who denied that there were any problems as the bubble was growing and growing, and who were still pushing for these agencies to go even further in promoting sub-prime mortgage loans almost up to the minute they failed. The Dems did this for a specific reason: to 'help' the lower classes by ensuring everyone was entitled to own their own home - qualified and capable or, not.
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I don't blame the 'poor' people for the housing mess. I lived in Phoenix during the start of the bubble, and the poor people or people who were buying houses bigger than they needed weren't as common as you might think.
A certain radio host never mentions there was a huge number of first time real estate investors that were getting these 0 down, interest only loans. They wanted to hold on to a house for a few months and then sell it to another people who wasn't going to live in the house, but for a higher price. There were also the real estate investment companies that bought 'ugly houses' and new developments. This increased the price for first time homebuyers that would then be considered 'poor'. This massive move to invest in real estate and get a quick (low tax) buck was what fueled the increase in house prices. Not that massive amounts of minimum wage workers were getting loans for $400,000 houses.
You also have people who can afford the payments, but don't see the point when the house they bought two years ago for $350,000 is now worth $200,000. Instead of selling it and still having to pay the bank back the rest over the next 30 years, they choose to walk away because they will lose less. And with unmarried partners, if only one of them is on the first house title/loan, the other one can still buy a house with no problem the next day.