The Greg Knapp Experience

This YouTube post has now gone viral. It does a good job of explaining the beginnings of the subprime mortgage crisis going all the way back to Jimmy Carter. I’ve been talking about the Community Reinvestment Act on the show. It basically said that lenders were being discriminatory in giving home loans. Banks were told they had to give more home loans to poor mind wordy borrowers or they would be penalized.  (Further studies later showed that there was no discrimination in the home loans. The earlier studies were flawed with bad data.)  It wasn’t too bad until the mid-90s. Then the Democrats and Bill Clinton put together a new push for more subprime mortgages for people who really couldn’t afford the loans. The Democrats also pushed for Fannie Mae and Freddie Mac to support these loans. Fannie and Freddie would buy a bunch of this bad debt and package it and resell it to investors. It’s not the whole problem, but it sure tells a big part of the story. Oh, by the way, Bush and McCain tried to rein in these problems in 2002 and 2005. That’s not spin, that’s the truth. Google it, Rosie.