Democrats didn't challenge low lending standards because they liked "affordable" housing.

[dkf]

"Federal regulators of banks, savings and loans and credit unions warned of lax lending standards and risky loans as early as 2003 but didn't push for more power to regulate mortgage brokers or non-bank lenders.

Nor did Congress or the White House make much of a push. Republicans were eager to let free markets work. Democrats liked the expansion of affordable housing to middle- and lower-income buyers."

http://news.yahoo.com/s/mcclatchy/20080918/pl_mcclatchy/3049128

This does seem to be part of the reason nobody was raising hell about the loose standards. My question is what can we do to solve this problem? And now that we are really in debt up to our eyeballs, can we do anything for housing or healthcare or education?

Maybe the Republicans have accomplished their goals after all, which was to drown government, by spending everything and more.

[Trajan]

1. It wasnt the home ownership that was the problem, necessarily ....

It was the LACK OF INCOME due to an economic philosophy that denigrated wage increases while expenses increased beyond reach ....

IF workers had been receiving decent wage increases : the bills would have been paid ....

It is a conservative LIE to blame the poor and middle classes for obtaining loans : The loan terms, and the lack of decent income, were the root cause of this mess ...

The current problems are a consequence ....

IMHO

[dkf]

2. But weren't the Dems trying to get financing for people who

were having a hard time qualifying?

I'm just saying that I think this is the reason the Dems didn't push hard to regulate, because they wanted those who had a problem in the past to get access to loans.

In retrospect though, that wasn't the way to fix the problem.

So you think the solution to affordable housing is to increase the minimum wage?

[Trajan]

4. I agree that loan requirements should NOT have been so loose ...

As a matter of course ... BUT: everyone should be able to get a loan if they are trustworthy AND have the income required ...

As far as raising the minimum wage: It isnt just the minimum wage, but EVERY workers wage ...

Wages have stagnated since the Fratboy Prince came to office: Even before then .... and that was due to the RW argument that wages take too great of a bite out of profits .... But if wages are left to peter out: economic activity peters out too ... NOBODY gets rich if the middle class isnt buying your product .... The wealthy become wealthy when poor people buy things ....

The more money the poor and middle classes have: The more they buy .... And the richer the rich become ....

The Middle Class has been strangled, and the whole economy is taking a hit because of it ....

So, yes: Raise the minimum wage slightly, but raise other wages COMMENSURATE WITH INFLATION ... allow them to move upward, and people will stay abreast of their obligations .... and maybe even buy something ....

[bluestateguy]

3. Tighter credit is not a bad thing

There is a reason why some people should be rejected for loans, and not everybody should rush into buying a house. It's not like everybody who lives in an apartment is living in the ghetto in abject poverty.

[marshall]

8. Students are graduating college with almost a hundred grand of debt

I work at a university and I am apalled at the ease with which students can rack up debt. I have seen them graduate with almost 100 grand of debt in student loans--and this is an undergraduate degree. And it isn't even counting the credit card debt they have racked up--and it is incredibly easy for them to get credit cards with several thousand dollars of credit. More than one have told me they view this as money in the bank rather than a line of credit.

Lending agencies have dropped their standard and we are paying for it now.

[dkf]

10. Wow. A credit limit is money in the bank?

I can't even relate to this. I only have one credit card because I hate debt.

I guess when you start your adult life knowing you will owe a hundred grand, it really warps your perspective.

[Tandalayo_Scheisskopf]

5. Here's the salient point:

The ARMs that mortgage brokers were selling were NEVER intended to be used for ownership of homes as residences for lower income people. They were never intended to be sold in their NINJA form. They were intended to be used as vehicles to enable house-flippers to flip houses. Nothing more. Unscrupulous and venal independent mortgage brokers started selling them to everyone who walked theough the door, and the big banks underwrote the mortgages and tranched them out. The agencies that had oversight on the market failed to rein things in, even though it was a complete perversion of the intent of ARMs.

There's the facts. It was a breakdown at the at the investment bank level, the market level and administration level, not the congressional level.

[dkf]

6. Yes but Dems not realizing that was the purpose didn't put their feet down

when they should have.

[creeksneakers2]

7. Its brave of you to run this

Its troubling too. I wonder if Democrats were warned of the financial peril that could come from too lax of credit rules. I also wonder how many knew.

Its hard to tell the validity of a statement about a party failing to do something. Its hard to tell why or pin anything down, like you could with an affirmative act. Whose responsibility was it to keep an eye out?

Still, I'd like to know more. If Democrats played a role in this they shouldn't be let off the hook.

[dkf]

9. I'm just interested in looking at real solutions to real problems.

I do think that Democrats were more bystanders in this mess. But I think they had their own sympathies that kept them from looking objectively at the problem.

I remember how certain communities used to tell stories about how they were responsible and had jobs, yet they didn't have access to credit. I used to think it was so unfair so I do understand the Dems dilemma.

Yet look at what has happened now. What a mess.