Iowa Liberal

Another piece of wingnut mythology gets shot down:

WASHINGTON – The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.

“Expect fallout, expect foreclosures, expect horror stories,” California mortgage lender Paris Welch wrote to U.S. regulators in January 2006, about one year before the housing implosion cost her a job.

Bowing to aggressive lobbying — along with assurances from banks that the troubled mortgages were OK — regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way.

“These mortgages have been considered more safe and sound for portfolio lenders than many fixed rate mortgages,” David Schneider, home loan president of Washington Mutual, told federal regulators in early 2006. Two years later, WaMu became the largest bank failure in U.S. history.

I don’t doubt that in their heart of hearts the wingers still believe that the current mortgage/Ponzi scheme fiasco can be laid exclusively at the feet of The Librulz vis a vi the Community Reinvestment Act. With my hand in a cast it makes it difficult to check with any degree of haste but I’d be willing to bet that Sean Hannity or the drug-addicted, thrice divorced Rush Limbaugh are paying scant attention to the above AP story even though I also don’t doubt that they’ve read it. One thing is for certain;It needs to be nailed to the eyelids of Art “never my fault” Downs. Ugh…the man is like a broken Wurlitzer.

-mg

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