How did Bush encourage the mortgage companies to develop exotic loan products for the subprime market?

Remember when Bush spoke of his "ownership society"? Did Bush give any incentives for those brokers and mortgage companies to create those exotic loan products, so many of which are now in default? Do you think that increased regulation could have mitigated this disaster?

How did Bush encourage the mortgage companies to develop exotic loan products for the subprime market?
You can't hang this on Bush. All the elements were created before he came into office. The R/E bubble collapse is not a "disaster." It is a perfectly normal end to the latest financial bubble. Everyone who got hurt voluntarily took the risk.
Reply:He didnt... neither did any other US president.


This was brought on by mortgage folks giving home loans to people who should NOT have had a home loan to begin with.





The createive loans were designed for investors but were given to homeownsers for the most part. Bad move.





Increased regulation could have prevented it but do we really need any more "big brothers" out there now?


I dont think so.
Reply:because hes bush ...................just like he convinces all them people to vote for him........................................ dont nobody realy care for american or the usa
Reply:Bush didn't actually do anything to encourage this loan mess, other than look the other way, when it was pretty obvious as to what was happening.





Of course increased regulation would have helped avert the seriousness of the situation, but then Bush would not have been able to make his claims that 'home ownership are at an all time high."





Now that the noose has tightened to the uncomfortable point, it appears that Bernanke will work to help institute tighter credit regulations for such loans.





This president claims to have a MBA from a prestigious university. I fear that, in his case, it stands for More Bungled Acts.
Reply:The loan products weren't so exotic... ARMs, interest-only, 110% financing... these aren't new.





The big problems were:


1) Making loans to unqualified borrowers (subprime)


2) Securitization of CMBS/RMBS/CDO with investment grade ratings that did not reflect their true risk





I don't like Bush or his economic policies, but I'd pin this one on the financial services industry and real estate players (including flippers).
Reply:First off, the mortgage standards were relaxed during the Clinton presidency. Second, the CONGRESS (especially democrats) mandated the banks and mortgage companies loan to low income families to promote home ownership. That make the congress a big bunch of hypocrites for trying to pin this on the president. Third, the banks and mortgage industry made alot of money during the past few years. Make them suck up all of the losses and not expect the taxpayers to bail them out. Unlike alot of the sub-prime folks who took out the loans, the banks KNEW what they were doing.
Reply:Bush did not have anything to do with it. The lenders came up with it all on their own. Also mortgage brokers dont have any money to lend, they just broker loans to the lenders and they sure dont create loans.

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