Unscrupulos Interests Blamed For Housing Market Meltdown
INDUSTRY NEWS, SHASTA COUNTY
June 11th, 2010
Henry Cisneros pinned the housing crisis on greedy Wall Street firms, not government policies he championed as HUD Secretary during the Clinton Administration. Exotic instruments were created to collateralize mortgages then packaged and sold around the world by profiteers wishing to take advantage of the housing boom. Henry is credited with expanding homeownership during his term as HUD Secretary from 1993-1997.
He also believes insurance agencies that rated these new financial instruments failed to accurately assess the riskiness of these investments. Cisneros addressed a group of real estate editors recently in Austin, Texas. However, he did place some blame on government’s unwillingness to regulate risky financial instruments during the Clinton and Bush Administrations.
Many have blamed the government for policies designed to increase homeownership among minorities for causing the housing bubble. Few would disagree that Fannie Mae and Freddie Mac facilitated the crisis by buying, repackaging and selling mortgage-backed securities that fell short of previous standards. Whistle-blowers at Fannie Mae alerted superiors that loans being presented by banks for purchase were not underwritten to their standards.
I believe there is plenty of blame to go around. If any of the players necessary to create this fiasco would have done their job, this crisis would have been averted. Overzealous lenders, Wall Street investment bankers, insurance companies and government regulators all failed to protect the integrity of time tested policies designed to prevent just such a tragedy. Unfortunately, few will be punished leaving them to enjoy their millions in profits as long as they live in this world.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN REDDING
MORE THAN 25 YEARS LOCAL REAL ESTATE SALES EXPERIENCE
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